Raleigh, N.C. – In 1975, Pepsi issued its famous challenge and asked consumers to choose between the two cola giants: Pepsi and Coke.
If only picking a soda were still that easy.
Go into any adequately stocked grocery store, and you’ll likely have more than 80 flavors of carbonated beverages to choose from.
And that’s just if you’re looking for a 2-liter bottle.
Start counting the sports drinks, energy drinks, juices and bottled water, flavored or plain, in all of their various-size containers, and the options multiply rapidly into the hundreds.
“A consumer who 15 years ago might have drunk Coke or Pepsi is today drinking Coke or Pepsi, plus a water, a sports drink, a tea and perhaps an energy drink,” said John Sicher, editor and publisher of Beverage Digest.
And while sales of sports drinks, energy drinks and teas have all been growing, soda sales have been shrinking, meaning soda companies are working hard to come up with the next Big Thing.
“It’s really essential for them, and they are doing it,” Sicher said. “But it makes managing what’s on the beverage trucks and what’s on the store shelves much more complicated.”
Simply flooding the market with new flavor options doesn’t guarantee success.
Flavors that flop are rapidly pulled from shelves and replaced with the next iteration, and companies know they will try several times before finding a bona fide beverage hit.
“If you can think of it, we can mix it with Pepsi and call it something,” said Matthew Bucherati, senior vice president of operations and supply chain for Raleigh-based Pepsi Bottling Ventures.
But what are the chances that all of those will be sales superstars? Not likely, according to Information Resources Inc., a Chicago research company.
According to IRI, less than 1 percent of all new products achieve $100 million in sales during their first year.
In the 2003-04 year, three beverages met that goal: Diet Coke With Lime, Sprite Remix (a tropical version of the lemon-lime staple) and Pepsi Vanilla.
The constant race to innovate means everyone involved in the soda industry must move faster and be more efficient.
Pepsi’s Bucherati said his company invested in faster manufacturing equipment capable of handling the volume and the larger number of daily changeovers from one product to another.
At Pepsi’s bottling plant in Raleigh, as many as 40 different products may be produced in a single day, he said.
“Every time you switch flavors, you’re trading off capacity because you have to flush the lines and sterilize the lines and get set up again,” he said. “It’s also forced us to get really good at changing over our lines.”
Also, instead of packing and shipping full pallets of one flavor of soda to a store, workers instead load a single pallet with flavors custom-ordered by the store.
And the speed of production has increased. On lines producing cans of soda, 27 cans are produced every second. For 20- ounce bottles, it’s 18 per second.
But what does all that variety mean for customers? Obviously, it means choice and also prices that stay lower because of the competition. But it also means stores dedicate more shelf space to beverages and rearrange things each time a product is introduced.
Worse, it could mean other categories become more limited as soda eats up more shelf space or that consumers stay confused by the reshuffling.
“Food Lion stores have been roughly the same size for the past 10 years,” said spokesman Jeff Lowrance. “But how our stores are arranged inside has changed a bit. When we remodeled our stores a few years back, we put new shelving in that allows us to put more products in.”
Likewise, restaurants are more strategic choosing beverages.
Most restaurants serve either Pepsi or Coke but can offer only eight options in a traditional soda pump like the ones found in most fast-food restaurants.
