Inside PepsiCo’s new innovation approach that led to Pepsi Nitro, Mtn Dew Major Melon and more
‘Popping attributes’
Eight of the top 10 products in IRI’s recently released annual Pacesetters list of 2021’s most significant food and beverage product launches are beverages. It’s a phenomenon Joan Driggs, IRI’s VP of content and thought leadership, attributes to COVID-sparked trends of consumers “taking the party home” in the case of alcoholic beverages—and to a growing consumer taste for flavor combinations in non-alcoholic drinks, like this year’s No. 1 Pacesetter in the category, Dr Pepper & Cream Soda from Dr Pepper Keurig.
PepsiCo rival Coca-Cola has also taken a fresh look at innovation, including with its flagship Coke brand. Its new Coca-Cola Creations program involves a series of limited-edition flavor varieties that seeks to tap into trendy topics, such as augmented reality. One flavor, called Coca-Cola Starlight, debuted in February and consists of a red-tinted liquid that the brand pitched as “space flavored.” Coca-Cola Zero Sugar Byte, marketed as “pixel-flavored,” followed in April.
Startup brands in the meantime are “lapping the field when it comes to the invention of creative new beverage products,” said Jeff Klineman, editor in chief of Bevnet, an industry trade publication. He’s quick to note that the ease and speed-to-market for DTC brands—and the peculiarities of marketing to fickle young consumers in search of something different—has made innovation a goal unto itself for some. The upshot is that smaller brands often flood the market with new products without regard to how profitable, or lasting, they might be.
“Maybe I’m biased because of the number of miracle-ingredient or wild flavor profiles we see at Bevnet, but I think there are different areas of business where [innovation] might be more important than the actual product itself,” Klineman said. “I think it’s getting harder to knock the consumer or retail customer on their fanny with something new, due to the lowering of market barriers.”
By contrast, big companies such as PepsiCo can’t simply “try things,” but rather must meet the demand for brands and extensions that can become profitable growth engines. This supports the need for Pepsi to look deeper into what Patel called “popping attributes” on an ongoing basis—abilities the Attribute Engine provides.
“We don’t look at these trends on a yearly basis or twice a year, we are looking at them every day,” she said. “This is a unique difference that has allowed us to become faster, because we can look at the trends and see when they go up, and when they go down.
“It’s also taking us to a place that allows our data scientists and our R&D partners who are developing these products to be ahead of these trends and to deliver our products faster to market than our competitors, allowing us to be more competitive,” she added. “A lot of our competitors are probably seeing similar trends in the market—what differentiates us is being able to take these attributes quickly and put them in a way that our R&D teams can make sense of them and develop an innovation pipeline from them, so that we can go to market quicker than our competitor.”