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Pepsi CEO Indra Nooyi explains how an unusual daily ritual her mom made her practice as a child changed her life

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indra nooyi

In 2006, Indra Nooyi became PepsiCo's first female CEO, as well as its first CEO not born in the US.

At a "Women in Leadership Panel" at 92Y in New York on Tuesday, Nooyi said she's always pushed back against adversity and her confidence is built upon an unusual daily habit her mother made her and her older sister, Chandrika, practice when they were just 8 to 11 years old.

Nooyi grew up in the socially conservative city of Madras (now Chennai), India. Her mother adhered to some traditional beliefs — she stressed the importance of seeking a good husband early — but she also instilled in her two daughters the belief that they could grow up to become whoever they wanted.

"Every night at the dinner table, my mother would ask us to write a speech about what we would do if we were president, chief minister, or prime minister — every day would be a different world leader she'd ask us to play," Nooyi said to the 92Y audience. "At the end of dinner, we had to give the speech, and she had to decide who she was going to vote for."

The winner of the debate then signed a piece of paper that stated they had become whatever the world leader of the day was. The girls and their mom would laugh and have fun with it, but Nooyi said she and her sister came to appreciate it, even after they became too cool for the ritual when they hit adolescence.

"Even though my mother didn't work and didn't go to college, she lived a life vicariously through her daughters," Nooyi said. "So she gave us that confidence to be whatever we wanted to be. That was an incredibly formative experience in my youth."

That confidence was reinforced by her paternal grandfather, a charismatic judge. If he asked her to do a job as a child and she later told him that she was unable to do it the way he wanted, he would make her write "I will not make excuses" 200 times on a piece of paper. She became grateful for this punishment when she grew older.

Nooyi's confidence and work ethic helped her achieve an MBA from the Yale School of Management in 1980 and to start building a successful career. Early on, she said men wouldn't make eye contact with her in meetings and would consistently check her answers with one of her male colleagues. But rather than wilt under the pressure, she began to call men out on their actions, and it wouldn't take long for them to realize she was highly adept at her job.

"In my heart I said, 'I can do this better than anyone else can, and if everything else fails, they're going to come to me and say, 'Fix it,' because I know I'm that good," she said. "Remember, I could be president of India!"

SEE ALSO: How Pepsi CEO Indra Nooyi motivates herself every morning

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15 mind-blowing facts about Coca-Cola (KO)

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coke

Coca-Cola is everywhere.

The iconic American brand is recognized instantly around the globe and sold in more than 200 countries.

On average, more than 10,000 soft drinks from Coca-Cola are consumed every second of every day. You'll be familiar with brands like Diet Coke, Sprite, and Fanta — but here are some facts about Coca-Cola you might not have heard before.

Kim Bhasin contributed to an original version of this report.

NOW SEE: QUIZ: Do you know what the numbers attached to these 13 brand names mean?

Coca-Cola was invented by Atlanta-based pharmacist John S. Pemberton in 1886. But the name was conjured up by his bookkeeper, Frank Robinson, who was also a dab hand with a pen. He created the unique flowing script that became the Coca-Cola logo that is still used today.



When Coca-Cola first launched it was marketed as a nerve tonic that "relieves exhaustion." This ad was published c.1886.



You may have heard this story before, and it's true: The very first Coca-Cola products contained cocaine — but only around 9 milligrams per glass. The drug was touted at the time as a substitute for alcohol and was said to cure opium addiction. But cocaine was removed from Coca-Cola in 1903.

Source: Daily Mail and Wikipedia



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Subliminal sex messages hidden in ads for wholesome brands

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Subliminal messaging has been part of advertising for a long time. And more often than not, that messaging is related to sex in some way.

Here are five examples of innocent products that hid some risqué material in their ads.

Produced by Matt Johnston

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26 years later, you'll be able to buy the Pepsi from 'Back to the Future 2'

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In 1989's "Back to the Future" sequel, Marty McFly (Michael J. Fox) heads to the year 2015.

While there, he pops by the local cafe to order a Pepsi and is surprised to be given a curious bottled beverage: a Pepsi Perfect.

marty mcfly pepsi perfectpepsi perfect bttf 2

Though Pepsi never came out with the cola, that's about to change.

According to a release, Pepsi will finally debut a soda modeled after the one in "Back to the Future 2" on October 21, 2015, the day Marty travels to the future.

If you're planning to purchase one, you'd better be quick. Pepsi is only releasing 6,500 of the Pepsi Perfect bottles and each one will cost $20.15. 

If you're heading to New York Comic Con from October 8-11, you may be able to get your hands on one early.

The first 200 fans who head to the Pepsi Perfect Booth each day dressed as Marty McFly will receive a free bottle. 

Here's the schedule and requirements:

  • McFly Schedule:
    • Thursday  – 1-2 p.m.
    • Friday – Sunday – 11 a.m.-12 p.m.
  • McFly outfits must contain the following:
    • Puffy red vest or Back to the Future Part II jacket
    • Blue jeans
    • White high-top sneakers
    • Watch
    • Optional: hoverboard

Other fans will have an opportunity to win a bottle at 3 p.m. if they play a game of Quick Draw at the booth. 

Keep your eye on Pepsi's socialmedia accounts for more info on how to get one of the 6,500 bottles.

Sorry Pepsi drinkers, it doesn't look like it will come in Diet.

Watch an ad Pepsi released for Pepsi Perfect below:

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NOW WATCH: Mark Zuckerberg just got on stage and raved about the future of virtual reality

Pepsi got slammed by Venezuela (PEP)

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pepsi kick drum

PepsiCo reported third-quarter profits and sales on Tuesday morning that topped analysts' expectations.

Profits, however, fell from a year ago because of a massive charge in its Venezuela business and weakening currencies.

Profits dropped to $533 million, or $0.36 per share, from $2 billion, or $1.32 a share. Last quarter, the company wrote down the value of its struggling business in Venezuela, taking a hit of about $1.4 billion. PepsiCo will not include results of local Venezuelan subsidiaries in its financial statements from next quarter, and it said it "remains dedicated" to serving the market.

On an adjusted basis, the company reported earnings per share (EPS) of $1.35, beating analysts' estimate for $1.26, according to Bloomberg. Sales were $16.3 billion, better than the forecast for $16.1 billion.

Fluctuations in foreign currency shaved off 12% from profits.

PepsiCo is more bullish on its performance this year, and it raised its EPS growth target (in constant currency) for the fiscal year to 9% from 8%.

"Despite ongoing volatility in many of our key international markets, we delivered strong organic revenue growth, gross margin expansion and double-digit core constant currency EPS growth," CEO Indra Nooyi said in the earnings release.

PepsiCo shares rallied nearly 3% in premarket trading. They are up about 1% year-to-date and 2% over the past year.

SEE ALSO: People hate the new Diet Pepsi

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NOW WATCH: We Recreated The Pepsi Challenge To See What People Really Like

People are going nuts for this rare Pepsi bottle from ‘Back to the Future'

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Pepsi recently announced they would be releasing a limited number of special edition Pepsi Perfect bottles, the same futuristic soda shown in "Back to the Future Part II." Fans at this year's New York Comic Con dressed as Marty McFly got their hands on it ahead of time. Pepsi will only be selling 6,500 Pepsi Perfect bottles for $20.15 starting October 21, the same day Marty McFly travels to the future in the film.

Produced by Christine Nguyen and Darren Weaver. Original reporting by Kim Renfro.

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These 16 companies control almost everything you buy

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Johnson and Johnson

Powerful companies create brands and products that we might not know are theirs.

Companies' signature brands add to their annual revenues and provide an edge to competition.

To determine how powerful each company is, we factored together fiscal 2014 revenue, the number of employees, and press mentions on Google News over the past year.

Here is a list of retail companies that own brands and products that we use every day.

SEE ALSO: The 50 most powerful companies in America

FOLLOW US: On Twitter

Procter and Gamble

2014 revenue: $83 billion

Number of employees: 118,000

P&G is the global leader in consumer goods with an unparalleled production scale and international reach. Some of the top P&G brands are everyday household items such as Tide, Swiffer, Crest, Olay, Pampers, Pantene, Herbal Essences, Old Spice, Vicks, Gillette, and Head and Shoulders.



CVS

2014 revenue: $139.38 billion

Number of employees: 200,000

More people than ever pick CVS as their go-to spot for filling prescriptions, making it the biggest retailer of prescription drugs in the USCVS, headquartered in Rhode Island, will purchase Target's pharmacy and clinics businesses for about $1.9 billion, adding almost 2,000 pharmacies to its business.



eBay

2014 revenue: $17.9 billion

Number of employees: 34,600

In its 20th year of operation, eBay has a huge command over online shoppers spanning 203 markets worldwide. While it previously ran PayPal, it continues to run the online-ticketing-company StubHub.



See the rest of the story at Business Insider

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There's a new Big Tobacco — and one industry is determined to silence its critics

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beyonce pepsi

Lawmakers and consumers are turning against big sugar, and soda companies are reeling.

On Tuesday, the Food and Drug Administration announced that Americans should eat and drink no more than 50 grams of sugar — roughly the amount in a can and a half of Coke — each day.

The new proposal has been years in the making: Chatter of the need for a cap on sugar has been circulating among consumers, lawmakers, and public-health advocates since research in the early 2000s first linked our excessive consumption of the stuff with obesity, weight gain, and other health problems — especially in children.

Not surprisingly, soda and processed-food companies are less than pleased.

The American Beverage Association, the soda industry's main lobby group, has since invested millions of dollars fighting laws to tax and label sugary beverages. For its part, Coca-Cola has been accused of pumping money into misleading research that champions exercise over dietary changes for health and weight loss — the company has promised to increase transparency about these research partnerships going forward.

But if our diets are any clue into whether a sugar cutback could be useful, they reveal a pretty big area for improvement.

Is sugar the enemy?

yogurt, Yoplait, grocery, food, disposable containers Before sugar was the enemy, it was fat.

Headlines of the 1980s and '90s were filled with missives that butter, oil, and meat were killing us. Soon, grocery store shelves were filled with low-fat alternatives to every rich food: Margarine, skim milk, and eggbeaters lined the shopping bags of every health-conscious consumer.

Now we know fat is not the enemy, thanks to an outpouring of recent research showing that in small amounts, probably no single food — be it salt, sugar, or fat — can be targeted as the cause of all of our problems.

As several writers and researchers have since suggested, this process of demonizing specific ingredients harkens back to the crusades against Big Tobacco.

Candy Cigarette Machine

"Soda follows tobacco's playbook to the letter," Marion Nestle, a professor of nutrition, food studies, and public health at New York University and the author of the book "Soda Politics," which explores the relationship between soda industries, politics, and public health, told Business Insider. 

While there's no doubt that fat or sugar are anywhere near as bad for us as cigarettes (as Nestle says point-blank: "Sugar is not tobacco") some headlines seemed to suggest as much. And the food and beverage industry reacted accordingly, scrambling to remove fats from foods.

Ironically enough, food makers began replacing all this fat with another ingredient: sugar.

Hence the makers of yogurt, cereal, and snacks started smacking "non-fat" or "low-fat" labels on all their products. Even candies like Twizzlers and Lemonheads — which each contain roughly 20g of sugar per serving (close to half the FDA's new daily maximum recommended allowance) — were proudly declared "fat free."

Consumers, lawmakers, and a growing body of scientific research side with the FDA: Too much sugar is bad for us

big gulp nyc soda ban

And as far as processed convenience foods go, soda may just as bad of an offender as candy.

A systematic review of 50 years of studies published in the American Society for Clinical Nutrition in 2006 found a link between the amount of sugar-sweetened beverages people consumed and weight gain and obesity.

Specifically, the researchers found "strong evidence for the independent role of the intake of sugar-sweetened beverages, particularly soda, in the promotion of weight gain and obesity in children and adolescents," they wrote in their paper.

In the years since, the research has continued to pile up. A 2009 study in the New England Journal of Medicine written by seven experts in public health, nutrition, and economics made the links between sugary drinks and America's obesity problem explicit:

"The science base linking the consumption of sugar-sweetened beverages to the risk of chronic diseases is clear," the authors wrote.

The science base linking the consumption of sugar-sweetened beverages to the risk of chronic diseases is clear.

One of the reasons soda may play such an important role in obesity has to do with how sugar is processed in the body.

All carbohydrates — bread, cereal, or potatoes — are ultimately broken down into glucose, which circulates in our blood and gives us energy. Sugars get broken down quickly and tend to raise blood glucose the most dramatically.

But while many foods that are high in natural sugars (fruit, milk, etc.) also contain other nutrients, like protein and fiber, which help build strong muscles and keep us feeling full, soda does not.

A traditional 12-ounce can of Coke, for example, has 140 calories and 39 grams of sugar and no protein or fiber to help round out the impact of the sugar. This is part of the reason sugary drinks, like Coke or Gatorade, are called "empty calories"— they most likely contribute to weight gain because they don't fill you up.

"The correlations between soda and obesity are extremely strong," said Nestle. 

According to the Centers for Disease Control, roughly one-third of all the calories Americans get from added sugars are from soda and sugary drinks. They get the other two-thirds from processed foods like snack bars, cakes, breads, and ice cream.

And the science suggests that cutting calories, especially in the form of sugary beverages, has the potential to have a far larger effect on weight than exercise.

"Studies tend to show that in terms of weight loss, diet plays a much bigger role than exercise," Philip Stanforth, a professor of exercise science at the University of Texas and the executive director of the Fitness Institute of Texas, told Business Insider.

Efforts to curb our soda habit

In 2013 while still in office, former New York City mayor Michael Bloomberg tried (and failed) to ban oversized sugary drinks; around the same time, Berkeley, California, passed a tax on sugary beverages. And San Francisco recently slapped warning labels on drinks with added sugar. In all, 33 states have laws taxing sugary drinks.

Vintage Coke AdBut experts have said these taxes are still too low to meaningfully affect consumption, with some going so far as to propose a higher penny-per-ounce amount. And if Bloomberg's XL-soda ban was a test of how far consumers are willing to go to take action on sweetened beverages, the odds of a real shift in consumption aren't looking great.

Still, once Bloomberg was mocked for advocating for a different kind of ban — outlawing smoking in restaurants and bars, something that has become the new normal across the US. Anti-obesity advocates are quick to draw comparisons between tobacco and beverage industry groups, saying that the American Beverage Association creates its own science and misleadingly rebrands products in a way that is reminiscent of Big Tobacco's prior efforts. Now these advocates are attempting to use similar strategies to those that drastically reduced tobacco usage to do the same when it comes to sugar.

There are signs that this change is coming, if slowly.

Across the board, per capita soda sales are down 25% since 1998, The New York Times reported in October. Juice sales are similarly dropping, with orange-juice consumption down 45% per capita in the same period. On a related note, in November, the University of Colorado School of Medicine gave back a $1 million grant from Coke after discovering that the funds were spent on an advocacy group for that research.

Soda companies are taking notice, and exploring ways to make up for the losses

Pepsi BeyoncePepsi and Coke are trying to recoup their lost sales and taking a dual-pronged approach: In addition to trying to reframe products and convince consumers that sweet beverages are ok to drink, they're also investing outside of traditional sweet beverages.

Nestle says these moves harken back to the same strategy Big Tobacco used in the 1980s. "First, they attack the science. Then, they fund community groups, promote exercise as a solution, and say they're self-regulated and don't need to be regulated by an outside source," Nestle said.

If soda companies want people to continue to drink sodas, they need to present evidence that the beverages aren't always the sugar bomb that scientific research is presenting. A major way to do that is to cut calories — not necessarily by reworking recipes, but by making serving sizes smaller.

Coca-Cola is going "back to its roots" by shifting focus toward smaller cans and bottles. According to the company, retail sales of smaller cans and bottles, including mini cans and glass bottles, were up 17%. So even as per capita consumption of soda by the gallon go down, sales of smaller packages go up.

These changes allow the chains to put a positive, healthy spin on the brands without requiring major changes in sodas' nutritional makeup. For example, when the American Beverage Association pledged in 2014 to cut drink calories by 20%, that doesn't necessarily mean a can of Coke or Pepsi will have 20% fewer calories. It may just be 20% smaller. Last August, Reuters reported that Coke and Pepsi's mini cans — 7.5-ounce versions of the traditional 12-ounce sodas — had been one of the few bright spots in US soda sales in the previous month.

"That's the soda industry's response," Nestle said of the mini-can campaign. "They want to be part of the solution, and they charge more for them."

coke pepsi mini cans

Still, while Coke and Pepsi are exerting a lot of effort to make sure their namesake beverages stay on the shelves, the companies are also very aware of the need to bring in some lower-sugar options.

In October, PepsiCo CEO Indra Nooyi told investors that focusing solely on carbonated soft drinks was "a thing of the past." Instead, noncarbonated beverages are "driving all the growth in the whole industry."

Nearly half of Pepsi's beverage sales are now in low- or zero-calorie drinks, juice, or sports drinks, more than double the proportion these drinks represented 15 years ago. In the past few years, Coca-Cola has invested in brands including Monster Energy, coconut-water company ZICO, and organic-focused Suja Juice. Both companies reportedly were in talks to invest in Greek yogurt maker Chobani.

"Today, more than 1,000 reduced-, low- or no-calorie options are available in our global portfolio, representing more than 25 percent of the beverages we offer around the world," a Coca-Cola spokesperson said in a statement to Business Insider (PepsiCo declined to comment for this story). "Of our top 20 brands, 18 are now available with reduced-, low- or no-calorie options."

Of course, many of these products are still high in sugar (a 32-ounce bottle of PepsiCo's Gatorade, for example, can easily exceed the 50g sugar limit). However, they do represent a major change in what Americans are drinking.

Should you quit soda?

It's no doubt that exceedingly high levels of sugar are bad for us. Sports drinks and sodas squeeze more of the stuff than we should consume in a day into a single serving.

But, as a growing body of research is showing, no single ingredient alone can be blamed. Rather, it's the amount and the types of food we're eating that need to be reassessed. Our portion sizes, for example, have ballooned in recent years, having increased up to 700% in some foods.

Giant sodas masquerading as a standard component of any meal are no exception.

READ MORE: The government just proposed a sea change to American diets — and one industry is furious

SEE ALSO: The healthiest things you can order at 12 fast-food chains

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NOW WATCH: How to know if you're fat


Coca-Cola just revealed the future of its business is very different from the signature product

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Sparkling Smartwater
Coke wants customers to realize that it is much more than its namesake soda.

The company announced Wednesday it will be begin selling a carbonated-version of the brand Smartwater this month. The sparkling water will be available in one-liter bottles in select restaurants, hotels, and stores, as well as targeted events in New York City, Los Angeles, and Miami.

Next year, the company plans to make Smartwater Sparkling available in more packages and sizes, as well as expand into additional markets.

The new sparkling water signals an important step in Coca-Cola’s plan for the future, which is less focused on soda and more on creating a diverse portfolio of beverages.

When people think about our company, they naturally think about our flagship product in the sparkling category,” Coca-Cola CFO Kathy Walker said at the Morgan Stanley Global Consumer and Retail Conference on Tuesday.

However, as Walker goes on to explain, the company is trying to be much more than just a soda seller.

Coca-Cola is the largest still beverage company in the world, making recent investments in brands including Monster Energy, coconut-water company ZICO, and organic-focused Suja Juice. Twenty-five percent of Coca-Cola beverages worldwide are reduced-, low-, or no-calorie options.

This is not even the first sparkling water that Coca-Cola has launched. In March 2014, the company rolled out Dasani Sparkling nationwide.

The beverage industry as a whole is realizing it is essential to expand beyond soda, as Americans’ concern for nutrition grows and consumption of soda shrinks.

Bottles of Pepsi cola are seen in a display at PepsiCo's 2010 Investor Meeting event in New York, March 22, 2010.  REUTERS/Mike Segar

In October, PepsiCo CEO Indra Nooyi told investors that focusing solely on carbonated soft drinks was "a thing of the past." Today, nearly half of Pepsi’s beverage sales are in low- or zero-calorie drinks, juice, or sports drinks.

PepsiCo is also experimenting with sparkling water, as the company plans to launch new flavored sparkling Aquafina waters in the US next year, reports the Wall Street Journal.

It looks like 2016 is shaping up to a battle of the soda giants trying to boost sales by focusing on sparkling beverages that are very different from the sodas that made them famous.  

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NOW WATCH: Here's how much sugar is in your favorite drinks

Longtime staples of the American diet are in danger of going extinct

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milk and cereal

Americans are ditching grocery store staples like cereal, soda, and juice.

That's bad news for companies like Pepsi, Coke, and Kellogg that have built their brands around these products.

Cereal sales dropped 5% from 2009 to 2014. Soda sales per capita are down 25% since 1998, while orange-juice consumption is down 45% per capita in the same period.

Once, these items were seen as vital staples of the American diet. Now, as culinary trends and understandings of nutrition evolve, Americans have had enough.

Here’s what companies like Coke, Kellogg, and Pepsi are doing to adapt.

Adding new, trendy offerings to the shelves

Focusing solely on carbonated soft drinks is “a thing of the past,” PepsiCo CEO Indra Nooyi told investors in October.

Pepsi isn’t alone in its diversification. Companies who have built their brand on one item that’s going out of style, whether that be Pepsi or Kellogg’s cereal, are working frantically to expand their offerings with new creations and acquisitions.

fairlife coke

For example, in the last two years, Coke has acquired coconut-water company ZICO, raised its stake in coffee-centric Keurig, and purchased a 30% stake in organic, cold-pressed-juice company Suja. It also launched items, such as lower-calorie Coke Life, premium milk Fairlife, and carbonated Smartwater, that branch out from the company’s signature soda.

Today, the company boasts more than 1,000 reduced-, low-, and no-calorie options, representing more than 25% of the beverages the company offers worldwide. At Pepsi, nearly half of the company’s beverage sales are now in low- or zero-calorie drinks, juice, or sports drinks.

The strategy continues outside of the beverage industry. As cereal sales sink, Kellogg is launching more than 40 new products early next year, as well as working to expand its snack-food segment and boost its international presence.

Changing recipes

Special KAt companies such as Kellogg or Coke, the namesake product is synonymous with the company’s brand. These products will never disappear from the menu, even if people are moving away from sugary sodas and breakfasts.

However, companies can tweak well-known products to fit consumers’ changing tastes.

Kellogg’s is removing artificial color and flavors from all cereal. More specifically, it is adding more berries to the recently struggling Special K Red Berries.

In the juice business, Kraft reformulated the struggling Capri Sun line earlier this year to cut high-fructose corn syrup and reduce calories and sugar. The revamped beverage necessitated a 25% price increase, without bringing in new shoppers to justify the cost.

Repackaging

When the American Beverage Association pledged in 2014 to cut drink calories by 20% by 2025, many didn’t realize the industry group was promoting a trend toward smaller containers already happening in the soda industry.

coke pepsi mini cans

At Coca-Cola, retail sales of smaller cans and bottles are up 17%, even while the amount of soda sold per gallon is declining. Since Coke can make a greater profit by selling smaller containers, that’s good news for the company.

It’s also a change that the company hopes will earn it brownie points with anti-obesity advocates and placate shoppers skeptical of Coke’s sugary offerings. In March, the company came under fire for paying nutrition experts to write online posts featuring mini-cans of soda.

There is also a need to repackage juice. Next year, PepsiCo will begin labeling some Tropicana juices with a label certifying the beverage does not contain GMOs — despite the fact that the company spent almost $9 million opposing ballot measures that would have imposed the labeling in four states.

Reimagining and reframing

While repackaging products is a relatively easy fix, it represents bigger aspirations of companies making foods fading from the American diet. They don’t want to just change how products look — they want to change how people understand their products.

Coca-Cola, for example, doesn’t want people to see Coke as a dangerous sugar bomb — they want shoppers to see it as a post-exercise treat, leading to the company funding nonprofits that published research to support this message.

Special K Cherry

Kellogg is launching a major campaign to convince shoppers to see cereal as a foodie ingredient in a wide variety of dishes, not just something some people eat in the morning with milk. By collaborating with celebrity chefs, Kellogg isn’t trying to change the cereal itself — it is trying to change how people see cereal.

The company hopes this, along with new and revamped offerings, will help the morning-food segment post its first positive quarter in sales in more than two and a half years.

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NOW WATCH: Here's how much sugar is in your favorite drinks

Pepsi is launching a new kind of Gatorade in 2016

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gatoradePepsiCo is going to launch an organic Gatorade, as the company increasingly looks outside of the soda industry for growth.

Al Carey, the CEO of PepsiCo Americas Beverages, said that the company would debut an organic version of the sports drink next year.

“It’s a consumer interest,” Carey said at Beverage Digest’s Future Smarts conference on Monday. “I think they’re very interested in non-GMO and organic, and to the degree you can make it meaningful to the consumer — do it.”

The company is also launching a line of non-GMO labeled Tropicana juices in 2016.

Carey additionally highlighted recent and upcoming new PepsiCo products such as Mountain Dew Kickstart (a take on Mountain Dew with ingredients like fruit juice and coconut water), flavored Aquafina water and vintage-inspired sodas like Caleb’s Kola, 1893, and Dewshine.

Much of the company’s current growth areas are outside of the traditional soft drink market. PepsiCo CEO Indra Nooyi told investors in October that focusing solely on carbonated soft drinks is “a thing of the past.”

 

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NOW WATCH: We Compared SodaStream Cola To Coke — Here's What People Liked Better

An unlikely beverage is going premium and edging out soda

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smart waterAs Americans cut down on soda consumption, companies like Coke and Pepsi are eager to add low-calorie, nutritious options to their repertoire.

That means, in 2016, you can expect bottled water to be an unlikely hero in the stereotypically sugary beverage industry.

Water is currently one of the hottest beverages in the nonalcoholic-drink market, with major brands like Nestle’s Poland Spring, Coca-Cola’s Dasani, and PepsiCo’s Aquafina’s volumes growing from 7% to 9% in 2014. For comparison, Coke and Pepsi's volumes both fell close to 3% in the same time period.

When it comes to nutrition, nothing has a better reputation. If anything, water has a healthier reputation than is warranted: Rumors of water’s positive impact have reached mythical levels that the drink itself cannot reach.

That flawless image fits perfectly into PepsiCo and Coca-Cola’s hopes for a reputation makeover in 2016, after sugar-related concerns drove soda sales down and negative headlines up in 2015.

Looks like a #delicious celebration to us! Happy #LaborDay! #NYC #Boston #celebrate #yum #polandspring

A photo posted by Poland Spring Water (@polandspringwtr) on Sep 1, 2014 at 11:02am PDT on

“We’ve had some substantial investments in R&D that have allowed us to put out more new products,” Al Carey, he CEO of PepsiCo Americas Beverages, said at Beverage Digest’s Future Smarts conference. “Not all of it is skewed toward healthy, but very much healthy and very much single serve. And what that’s done for us is allowed us to change the mix of its portfolio.”

In the coming year, Pepsi and Coke will be all about debuting new healthy beverages — or at least brands perceived as healthier. However, while bottled water costs as much as 2,000 times as much as tap water, the beverage yields surprisingly low profit margins for companies. So beverage giants are investing not only in simple bottled tap water, but also in new, pricier takes on classic H2O.

In 2016, Pepsi is debuting new sparkling Aquafina flavored waters, while customers can expect the continued rollout of sparking Smartwater from Coca-Cola. Plus, there are more general healthy beverage innovations, like organic Gatorade, new flavors of ZICO coconut water, and sparkling Minute Maid juices.

Bottled water is a $13 billion business of which Coca-Cola and PepsiCo currently only have a 13% volume share in the US. (Nestle is far and away the leader, with almost half of the market.) There is major room for growth in this area — especially as companies best known for soda try to showcase a healthier and more diverse array of beverages.

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NOW WATCH: Is drinking carbonated water bad for you?

The 4 biggest ways American beverage consumption will change in 2016

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coke pepsi mini cansThe beverage industry is experiencing some major changes heading into the new year.

Sugary sodas are under fire. Juice sales are slipping. Many of the brightest points are new brands and beverages that no one had heard of a few years ago.

In other words, it’s a dramatic time to be in the world of beverages. Here are four key trends to watch out for in the industry in 2016, according to some of the biggest executives and experts in the business.

The growth of energy, water, and sports drinks brands

Focusing solely on carbonated soft drinks is “a thing of the past,” PepsiCo CEO Indra Nooyi told investors in October.

Instead, Pepsi and other major beverage companies are all about developing new healthy beverages — or at least brands perceived as healthier — in the new year.

“We’ve had some substantial investments in R&D that have allowed us to put out more new products,” Al Carey, the CEO of PepsiCo Americas Beverages said at Beverage Digest’s Future Smarts conference. “Not all of it is skewed toward healthy, but very much healthy and very much single serve. And, what that’s done for us is allowed us to change the mix of its portfolio.”

Sparkling Minute Maid

Next year, Pepsi is launching products like an organic Gatorade, new Aquafina flavored waters, and healthy vending machines. At Coca-Cola, customers can expect the roll out of sparkling Minute Maid and sparking Smartwater. In 2016, healthy beverages will take center stage, especially drinks that emphasize positive health benefits, instead of cutting calories, sugar, or sodium.

Reworking recipes

While companies are eager to brag about new healthy drinks, reformulation is a touchier topic — but a necessary one.

Core brands like Coke and Pepsi need to be reformulated with fewer calories or replaced with revamped versions, former Beverage Digest editor John Sicher said in a foreboding opening address at Future Smarts. 

mountain dew kickstart

Mountain Dew Kickstart’s success provides a key model for a successful recipe revamp. The line launched in 2013, combining aspects of sports drinks with the established soda brand to create a lower calorie beverage that quickly took off. PepsiCo also recently reformulated Diet Pepsi, changing the recipe to remove aspartame.

Coke is more adverse to the idea of reformulation, with the debacle of “New Coke” still fresh in executives’ minds even 30 years after the fact. However, newer, health-centric lines like Coke Life allow for launches of new recipes and easier tinkering without negative backlash.

“I’ve always seen Coke Life as 1.0,” said Coca-Cola COO James Quincey at Future Smarts. “If there’s a 1.0, there’s going to be a 2.0.”

Smaller cans and bottles

Regular and mini cans of Coke and Pepsi are pictured in this photo illustration in New York August 5, 2014. REUTERS/Carlo Allegri“The number of calories consumed by the population in... countries [where obesity is an issue] will have to go down,” Quincey said at Future Smarts, a bold statement in an industry where, historically, cutting calories means cutting sales. “Moderation is going to have to be key, and beverage is going to have to be a part of it.”

That requires reformulation and switching customers to lower-calorie offerings, but it also means finding ways to make more money selling less soda.

In 2014, the American Beverage Association pledged to cut calories by 20% by 2025. By serving smaller cans and bottles, can do just that, without necessarily cutting sugar from the recipe.

The downsizing of containers can’t go on forever, but for now, smaller cans mean more profit for the beverage industry — and less flack from anti-obesity advocates.

Attempts at authenticity

As the demonization of sugar increasingly paints big beverage companies as the enemy, the industry is eager to humanize itself.

Caleb's Kola

One route to authenticity is to attempt to tap into shoppers’ nostalgia. PepsiCo recently launched or announced plans to launch a number of vintage-inspired sodas, including Caleb’s Kola, 1893, and Dewshine.

Another path is to earn external symbols of approval. Next year, PepsiCo is launching a line of non-GMO labeled Tropicana, while Coca-Cola has faced backlash after quietly funding research groups and nutritionists who supported the company and its views.

The rise of craft beverages additionally gives big companies the chance to cash in on drinks with hipster credibility. The $1 billion acquisition of craft beer company Ballast Point Brewing & Spirits by Constellation set a new high mark for craft beer — and will likely have a ripple effect on the pricing and importance of acquisitions in nonalcoholic beverage companies going forward.

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NOW WATCH: Here's how much sugar is in your favorite drinks

China is going mad for this 6-minute-long Pepsi ad based on a Buddhist tale (PEP)

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Screen Shot 2016 01 08 at 16.54.58 (2)

2016 is the year of the monkey.

Well, not until February 8. But that has not stopped Pepsi from racking up over 15 million views in a week for its new 6-minute-long ad, "The Monkey King Family."

The video is not actually about a monkey, but an actor in the 1980s TV show "The Monkey King,"explained Ad Age, where we first spotted the epic video.  

"The Monkey King to us is like 'Star Wars.''" said Danielle Jin, PepsiCo's VP in China. "The story itself is sort of like 'Batman' or 'Spiderman' meets 'Lord of the Rings.'"

The tale derives from the classic Chinese novel, "Journey to the West." The book is about a Taoist monkey who is imprisoned under a mountain by an angry Buddha, after rebelling against heaven. Monkey eventually escapes by joining the epic quest of Buddhist monk Tripitaka to bring back some sacred scriptures from India, accompanied by a pig monster and a water monster. (A version of "Journey to the West" was also dubbed into English and ran on TV in the UK, under the title "Monkey," from 1978 to 1980, where it was regarded as a delightfully weird kids' show.)

While there are several versions of the advert being shared online, the 6-minute version is the most popular.

"People are looking for longer and more substantial content to view," Director Andrew Lok said.

The video is part of PepsiCo’s ‘Bring Happiness Home,’ which started in 2012.

Here's a look at the opening and closing titles of the UK version of "Monkey":

SEE ALSO: 11 photos that show how McDonald's has changed since the 1950s

Join the conversation about this story »

NOW WATCH: There's a conspiracy theory that the Miss Universe disaster wasn't really Steve Harvey's fault

The government just proposed a sea change to American diets — and it’s scary news for Pepsi, Coca-Cola, and Dr. Pepper

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CokeThis week, the USDA released a major report on guidelines for healthy eating that completely contradicts how most Americans eat.

One of the biggest changes is strict limits on the amount of sugar Americans consume every day. The guidelines caution against added sugars, advising Americans to consume less than 10% of calories per day from added sugars.

Currently, 70% of Americans consume more added sugar than this recommended limit, with much of this coming from sodas. According to the Centers for Disease Control, roughly one-third of all the calories Americans get from added sugars are from soda and sugary drinks. They get the other two-thirds from processed foods like snack bars, cakes, breads, and ice cream.

Why target sugar?

Before sugar was the target of health advocates, fat was public enemy No. 1. However, as fat was pulled from recipes in the 1980s and ‘90s, food makers began to replace the ingredient with something else: sugar.

Now, scientific research is indicating that sugar — specifically, added sugar, as found in soda — can be similarly dangerous.

A systematic review published in 2006 that examined 50 years of studies, found a link between the amount of sugar-sweetened beverages people consumed and weight gain and obesity.

fountain soda coke coca-cola ice beverage

Specifically, researchers found "strong evidence for the independent role of the intake of sugar-sweetened beverages, particularly soda, in the promotion of weight gain and obesity in children and adolescents.”

Since then, an increasing amount of damning research has emerged. As a 2009 study in the New England Journal of Medicine states, "the science base linking the consumption of sugar-sweetened beverages to the risk of chronic diseases is clear.”

While many foods high in natural sugars, such as fruit and milk, provide you with necessary nutrients and fill you up, sugary beverages lack the protein and fiber needed to balance out the impact of sugar. As a result, sugary drinks such as Coke or Dr. Pepper are more likely to contribute to weight gain.

"The correlations between soda and obesity are extremely strong," Marion Nestle, a professor of nutrition, food studies, and public health at New York University and the author of the book "Soda Politics" told Business Insider.

What can the USDA do?

As evidence again sugary beverages piles up, there have been increasing efforts to curb Americans’ soda habit.

In 2013, while still in office, former New York City mayor Michael Bloomberg tried (and failed) to ban oversized sugary drinks. Around the same time, Berkeley, California, passed a tax on sugary beverages, and nearby San Francisco recently slapped warning labels on drinks with added sugar. Currently, 33 states have laws taxing sugary drinks.

Coca-Cola, Coke, Coca Cola

Health groups' new guidelines are additionally attempting to cut soda consumption in the US. In addition to the USDA’s new guidelines, in November, the FDA announced Americans should eat and drink no more than 50 grams of sugar a day — roughly the same amount of a bottle of Coke.

These changes may not have an immediate impact, but can yield huge results in the long term. For example, a 10% tax on sugar-sweetened beverages introduced in Mexico in January 2014 was associated with a 12% reduction in sales of taxed drinks.

While critics argue that this isn't a large enough change to significantly impact consumers’ health, a 12% drop in sales is certainly enough to impact the soda business.

Even in an unscientific examination of beverage consumption in the US, it is clear that people have reduced their soda intake as the anti-sugar trend has grown. Per capita soda sales are down 25% since 1998, The New York Times reported in October.

Big soda’s reaction

Unsurprisingly, the soda industry isn’t pleased with efforts to turn customers away from sugary beverages. The American Beverage Association, the industry’s main lobby group, has already invested millions of dollars fighting laws to tax and label sugary beverages.

Anti-obesity advocates have drawn comparisons between tobacco and beverage industry groups, claiming that the American Beverage Association twists scientific research and misleading rebrands products in a way that is reminiscent of Big Tobacco’s prior efforts. So far, soda giants are trying to recoup lost sales by doing two things: convincing consumers that sweet sodas are ok to drink, as well as investing outside of traditional sugary drinks.

When it comes to attacking science, critics condemn Coca-Cola’s funding of research that emphasizes exercise over dietary changes for health and weight loss. The company promised in September to increase transparency about these research partnerships going forward. In December, emails leaked revealing that Coke helped pick a nonprofit's leaders, edited its mission statement, and provided input on minor issues such as the group’s logo.

Research aside, if soda companies want to convince people to continue to drink soda, they need to cut down on sugar and calories. One way to do that is by making serving sizes smaller. In other words, companies want to make more money by selling less soda.

Regular and mini cans of Coke and Pepsi are pictured in this photo illustration in New York August 5, 2014. REUTERS/Carlo Allegri

While the volume of soda Americans consume has dropped, the number of bottles and cans purchased is still rising. These smaller cans and bottles have the added bonus of generating greater profit.

“The consumer is moving to smaller packages,” Sandy Douglas said in a Morgan Stanley Global Consumer and Retail Conference in November. “A 12-ounce can traded to a 7-ounce can is a 30% reduction in volume, but it’s an increase in revenue.”

It also makes the companies look good. When the American Beverage Association pledged in 2014 to cut calories by 20% by 2025, that didn’t require Coke or Pepsi to craft a lower-calorie can of soda. It could just mean that cans are getting 20% smaller.

However, soda giants do realize the need to diversify and expand beyond sugary soda.

PepsiCo CEO Indra Nooyi told investors in October that focusing solely on carbonated soft drinks was "a thing of the past."

Sparkling Minute Maid

Instead, Pepsi and other major companies are developing new healthy beverages. This year, Pepsi is launching products like an organic Gatorade, new Aquafina flavored waters, and healthy vending machines. Similarly, Coca-Cola is debuting sparkling Minute Maid and sparkling Smartwater.

Many of these products are still high in sugar (a 32-ounce bottle of PepsiCo's Gatorade can easily exceed the FDA’s 50-gram sugar limit). However, as the FDA and USDA push Americans to make healthier decisions, moderation is key to the future of Americans’ soda consumption.

The study on the impact of taxing sugary sodas in Mexico revealed that, in addition to driving a 12% reduction in taxed drinks, there was a 4% increase in purchases of untaxed drinks the year after the law was implemented. Especially as sugary beverage sales are on the decline, soda giant are eager to make up those sales with beverages perceived as nutritous.

Join the conversation about this story »

NOW WATCH: Here's How Much Soda You Have To Drink To Make It Worth Buying Your Own SodaStream


PepsiCo says the Super Bowl is not the 'be all and end all' when it comes to advertising (PEP)

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beyonce

For packaged goods giant PepsiCo the Super Bowl is undoubtedly a massive occasion. Pepsi is sponsoring the halftime show for the fourth year running, Mountain Dew will return with an in-game spot, Doritos will air its last ever "Crash the Super Bowl" advert and Gatorade drinks will litter the field.

Even so, Pepsi chief marketing officer Seth Kaufman and PepsiCo snacks division Frito-Lay's chief marketing officer Ram Krishnan think the big game should be viewed as the culmination of months and months of marketing activity.

"We look at it not just as a single interaction on single day — we look at it as a whole six months of the NFL season in which we’ve activated all of the brands," Krishnan told Business Insider. "The game is almost an exclamation mark, it’s not the be all and end all, at the end of the journey of a conversation we’ve had with consumers for six months. Gone are the days when it’s just Super Bowl Sunday."

Pepsi's Kaufman added: "We’ll have conversations on different platforms throughout the game. That’s the big thing. It’s now a two way conversation between the brand and the consumer."

The two PepsiCo CMOs told Business Insider that it is important to look at how people consume media differently in an increasingly multi-screen age. It's not all about TV adverts during the Super Bowl this year because consumers have changed.

"The generation Z consumers are now our core target— most consumers are already digitally native and they’re content creators. They have their own social networks," Krishnan said.

But PepsiCo is still satisfied with the return on its massive investment on game day.

"We are always evaluating what value we’re getting out and we keep leaning in on this platform and I think that says it all," Kaufman said.

He said that the halftime show is particularly lucrative: "This is really the biggest concert of the year, with higher ratings than the rest of the game. 120 million people (are watching.)"

However, Pepsi's Kaufman was unwilling to explain the decision to invite Coldplay to headline the show, alongside Beyoncé. When Coldplay was announced as the headline act, many people aired their disappointment at the choice on Twitter.

"Think about this halftime show less about a headline act and more about it being Super Bowl 50. It’s about a celebration of past, present and future in music. It's certainly a nod back to Super Bowl halftime shows of the past," Kaufman said. 

Here's the full run-down of PepsiCo's marketing activity during Super Bowl 50:

Pepsi:

Pepsi is sponsoring the halftime show starring Coldplay and Beyonce.

It will also run an in-game advert starring a "top recording artist."

Finally, the drinks brand will run spots featuring Donald Faison — known for his role as Dr. Turk in "Scrubs." The first can be viewed here:

Doritos

The tortilla chip brand will put on its last ever "Crash the Super Bowl" advert during the game. The winner will get a $1 million prize and the chance to work with director Zack Snyder — known for his work on "300,""Man of Steel" and the upcoming "Batman v Superman: Dawn of Justice."

Here's one of the ads vying for the chance to win the contest this year:

Mountain Dew

Mountain Dew will promote its Kickstart range in the brand's first Super Bowl spot since 2000. The in-game ad will play on the combination of "three awesome things combined." Kickstart combines Mountain Dew, real fruit juice and caffeine.

Here's a teaser:

Tostitos 

Tostitos is the official chip and dip partner of the big game.

Gatorade

Gatorade will hydrate players on the field.

SEE ALSO: Doritos tells us why it has had enough of its 'Crash the Super Bowl' contest

Join the conversation about this story »

NOW WATCH: Meet the 13-year-old dance prodigy at the center of a big new ad campaign

Pepsi just revealed a huge clue about the future of its business

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Pepsi KolaPepsi is moving into the restaurant business.

The soda giant is opening a “restaurant-bar-event space” called Kola House in New York City, reports the New York Times. The location is intended to serve as a social hub and test market for new products, offering customers the premium soda experience.

The new location, which is still under construction, seems to be intended to add a feeling of authenticity to the brand. Recently, soda sales have been slipping, as Americans increasingly distrust sugary beverages and the companies that sell them.

A number of major brands have recently launched trendy and unexpected brick-and-mortar locations, with the New York Times namedropping Chobani’s flagship cafe and Nike’s showroom and fitness studio. However, the most apt comparison may be Starbucks.

starbucks reserve barista

The coffee chain opened its first Reserve Roastery and Tasting Room in Seattle in late 2014, as a means of showcasing the company’s more gourmet coffee offerings. While the Roastery isn’t a major sales driver, it publicly signals the company’s dedication to authenticity and keeping coffee snob-approved offerings on the menu.

As Americans grow more suspicious of Big Soda, Pepsi is trying to similarly signal this authenticity.

Caleb's Kola

The company has recently launched or announced plans to launch a number of vintage-inspired sodas, including Caleb’s Kola, 1893, and Dewshine. A restaurant and bar that isn’t covered in Pepsi logos, but instead serves cocktails mixed by an in-house “alchemist” is the company’s next step in attempting to convince customers that the brand is both trustworthy and relevant in 2016. 

SEE ALSO: Beer companies are using this counterintuitive method to get millennial customers back

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NOW WATCH: Here's how much sugar is in your favorite drinks

Yogurt-maker Chobani rejects PepsiCo's offer for stake in company

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Chobani Greek yogurt

(Reuters) - Greek-yogurt maker Chobani LLC, founded by billionaire Hamdi Ulukaya, said on Friday it had rejected offers from beverage giant PepsiCo Inc and other investors.

Chobani worked with Goldman Sachs Group Inc to explore the sale after being approached by several parties in 2015.

The decision to reject the offer was due in part to the terms, Chobani said in an email to Reuters.

The yogurt maker wanted to sell a minority stake while outside investors like PepsiCo were looking for a majority stake in the company.

Chobani said that independence remained a key asset to the company and the brand. 

Coca-Cola Co, which was competing against rival PepsiCo to invest in Chobani, ended talks to invest in the Greek-yogurt maker in October, saying it was not the best fit for Coca-Cola's portfolio.

Other companies have also expressed interest in Chobani. One of them has been organic foods producer WhiteWave Foods Co .

PepsiCo was not immediately available to comment.

(Reporting by Subrat Patnaik in Bengaluru and Greg Roumeliotis in New York; Editing by Sandra Maler)

Join the conversation about this story »

NOW WATCH: We tried savory yogurt at Chobani's brick-and-mortar yogurt bar in NYC

Pepsi's head of marketing told us the theme of the Super Bowl half-time show (PEP)

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Beyonce

For packaged goods giant PepsiCo, the Super Bowl is undoubtedly a massive occasion. Pepsi is sponsoring the halftime show for the fourth year running, Mountain Dew will return with an in-game spot, Doritos will air its last ever "Crash the Super Bowl" advert and Gatorade drinks will litter the field.

We spoke to Pepsi's chief marketing officer Seth Kaufman and PepsiCo snacks division Frito-Lay's chief marketing officer Ram Krishnan ahead of Super Bowl weekend to find out why it spends so much on the big game each year.

But first we had to ask about the half-time show. Kaufman was unwilling to explain the decision to invite Coldplay to headline, alongside Beyoncé. When Coldplay was announced as the headline act, many people aired their disappointment at the choice on Twitter.

But he did tell us the theme: "Think about this half-time show less about a headline act and more about it being Super Bowl 50. It’s about a celebration of past, present and future in music. It's certainly a nod back to Super Bowl halftime shows of the past," Kaufman said. "This is really the biggest concert of the year, with higher ratings than the rest of the game. 120 million people (are watching.)"

But for the company, the big game is just the culmination of months of marketing activity. The 15-minute performance is not "the be all and end all."

"We look at it not just as a single interaction on single day — we look at it as a whole six months of the NFL season in which we’ve activated all of the brands," Krishnan told Business Insider. "The game is almost an exclamation mark, it’s not the be all and end all, at the end of the journey of a conversation we’ve had with consumers for six months. Gone are the days when it’s just Super Bowl Sunday."

Pepsi's Kaufman added: "We’ll have conversations on different platforms throughout the game. That’s the big thing. It’s now a two way conversation between the brand and the consumer."

The two PepsiCo CMOs told Business Insider that it is important to look at how people consume media differently in an increasingly multi-screen age. It's not all about TV adverts during the Super Bowl this year because consumers have changed.

"The generation Z consumers are now our core target— most consumers are already digitally native and they’re content creators. They have their own social networks," Krishnan said.

But PepsiCo is still satisfied with the return on its massive investment on game day.

"We are always evaluating what value we’re getting out and we keep leaning in on this platform and I think that says it all," Kaufman said.

Here's the full run-down of PepsiCo's marketing activity during Super Bowl 50:

Pepsi:

Pepsi is sponsoring the halftime show starring Coldplay and Beyonce.

It will also run an in-game advert starring a "top recording artist."

Finally, the drinks brand will run spots featuring Donald Faison — known for his role as Dr. Turk in "Scrubs." The first can be viewed here:

Doritos

The tortilla chip brand will put on its last ever "Crash the Super Bowl" advert during the game. The winner will get a $1 million prize and the chance to work with director Zack Snyder — known for his work on "300,""Man of Steel" and the upcoming "Batman v Superman: Dawn of Justice."

Here's one of the ads vying for the chance to win the contest this year:

Mountain Dew

Mountain Dew will promote its Kickstart range in the brand's first Super Bowl spot since 2000. The in-game ad will play on the combination of "three awesome things combined." Kickstart combines Mountain Dew, real fruit juice and caffeine.

Here's a teaser:

Tostitos 

Tostitos is the official chip and dip partner of the big game.

Gatorade

Gatorade will hydrate players on the field.

SEE ALSO: Doritos tells us why it has had enough of its 'Crash the Super Bowl' contest

Join the conversation about this story »

NOW WATCH: Here are the 4 best ads of Super Bowl 50

Coca-Cola and Pepsi are depending on 'the marketing trick of the century' to save business

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smartwater with nailsIn the next few years, bottled water will likely overtake carbonated-soft-drink sales. Surprisingly, that could be good news for soda giants — and bad news for consumers.

“Bottled water is the marketing trick of the century,” writes John Jewell in The Week.

Companies selling bottled water, he argues, have managed to convince Western consumers that buying water is a healthier choice than sugary soda.

However, the comparison is a case of false equivalence. Bottled water isn’t simply an alternative to soda — it’s an alternative to the much more inexpensive and eco-friendly tap water.

"The purchase of bottled water allows us to communicate our uniqueness and the care we have for bodies and the environment," writes Jewell.

This nutrition-minded and independent sense of self is exactly what soda giants like Pepsi and Coke are currently trying to tap into.

Bottled water

In 2014, the volumes of major water brands, including Nestle’s Poland Spring, Coca-Cola’s Dasani, and PepsiCo’s Aquafina, grew 7% to 9%. For comparison, Coke and Pepsi’s volumes fell close to 3% in the same time period.

Consumers’ thirst for bottled water is only growing — on Thursday, major European bottling company Coca-Cola Enterprises, Inc. reported that total water volume increased 12% in 2015.

“We’ve had some substantial investments in R&D that have allowed us to put out more new products,” Al Carey, CEO of PepsiCo Americas Beverages, said at Beverage Digest’s Future Smarts conference in December. “Not all of it is skewed toward healthy, but very much healthy and very much single serve.”

hiker drinking bottled water in desert

Bottled water’s manufactured status as the healthiest beverage around is exactly the reputation that Coke and Pepsi want to earn. In recent years, the company has been plagued by sugar-related concerns that drove soda sales down and negative headlines up.

However, while bottled water can cost 2,000 times as much as tap water, the beverage yields surprisingly low profit margins for companies. So these beverage giants are not only investing in simple bottled tap water — the most straightforward marketing trick in existence — but also new, pricier takes on the classic H2O.

jennifer aniston smartwater

In 2016, Pepsi is debuting new sparkling Aquafina flavored waters. The drinks will be the “official hydration sponsor of New York Fashion Week” this spring, a glitzy title that continues the elevation of the most basic beverage. At the same time, Coca-Cola is rolling out sparkling Smartwater, with actress Jennifer Aniston as spokesperson.

Bottled water is a $13 billion business that, logically, doesn’t need to exist.

Jewell sums up his piece on the industry by saying that bottled water is a symbol of a “disposable culture” that values branding over the environment. Coke and Pepsi would likely disagree with that sentiment — but if there is one thing these soft-drink giants can do, it is market a beverage.

SEE ALSO: Coca-Cola has discovered an untapped market to save the soda business

Join the conversation about this story »

NOW WATCH: Coca-Cola is now selling milk and it costs twice as much as regular brands

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