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Pepsi-Cola Co. will mount an all-out ad offensive next year as Mountain Dew moves closer to edging out Diet Coke, the nation's third-largest soft-drink brand.

The marketer is still mulling over how it should crow about Mountain Dew's likely milestone, but one thing is clear: the neon green soda will be featured on the Super Bowl Jan. 30. Pepsi-Cola also will escalate media spending next year above its current $40 million budget, according to executives familiar with the plans.

Less than half a percentage point stands in the way of Mountain Dew's crusade to overtake Coca-Cola Co.'s Diet Coke. According to figures from Beverage Digest, through March 21 Mountain Dew commanded a 6.9% share of the $56.3 billion U.S. soft-drink business, compared with Diet Coke's 7.1%. Mountain Dew's volume, meanwhile, rose 7.6% above last year for the period, while Diet Coke's rose only 2.4%.


If Mountain Dew overtakes Diet Coke, it will shift bragging rights as to which beverage giant markets two of the top three soft-drink brands in the U.S.

"Pepsi definitely thinks it has potential to surpass Diet Coke," said Salomon Bros. beverage analyst Jennifer Solomon. "There's a shift toward flavors in the industry, and, as flavors go, Mountain Dew is king."

A Pepsi spokesman declined to comment on plans for Mountain Dew. But a Pepsi bottler said the brand is "on the precipice" of becoming No. 3.

"It continues to grow year in and year out. It's always had an adventuresome radicalness about it. It appeals to youth, and it's got a sustainability to older drinkers," the bottler said.

Pepsi's goal is to hike Mountain Dew sales 10% in 2000. To do so, the marketer plans to broaden the brand's appeal to more mainstream consumers.

Currently, the soda, with its citrus flavor and strong dose of caffeine, has a particular attraction to hip teens who enjoy alternative sports like snowboarding and mountain biking.

Youths still will be the primary target. Pepsi plans to hand out coupons for Mountain Dew near schools, and is slated to expand the soda's Internet presence and grass-roots marketing in urban areas. It also will return to sponsor the NCAA college-basketball championships in March, according to an executive familiar with the plans.

BBDO Worldwide, New York, handles the brand, and is behind its long-running campaign, themed "Do the Dew." UniWorld Group, New York, known for its strong urban marketing, was added to the roster this year.


Last year, Mountain Dew led the industry in volume growth with a 9.9% jump, and far outpaced the industry's overall gains of 3%, as well as Diet Coke's rise of 4.4%, according to Beverage Digest.

The soda, with its 1960s hillbilly heritage far behind it, was the fourth largest soft drink last year, with 6.7% of the market, according to Beverage Digest. Coke Classic was a solid No. 1, with 20.6% of the market, followed by Pepsi-Cola, with a 14.2% share. Diet Coke held the No. 3 slot with an 8.6% share of the market in 1998.

Mountain Dew has been on the rise for several years, thanks to stepped up efforts to get the 55-year-old brand into the hands of younger consumers. This year, the soda got a face-lift with new packaging.

But it's also been aided by consumer boredom with colas. "There is an element of cola fatigue," Ms. Solomon said.

Spending has already been on the rise. Last year, Pepsi hiked Mountain Dew spending 37% to $40 million. Through the first five months of this year, the company spent $22 million, according to Competitive Media Reporting.

Coca-Cola Co. cut spending for Diet Coke by 22.5% to $28 million last year.

Mountain Dew has no serious competitors right now. In 1997, Coca-Cola launched Surge as a defensive move, but that brand has shown steep declines. Surge sales fell 58.4% for the year as of July 11, according to Information Resources Inc.

In fact, Pepsi watchers and insiders have said for more than a year that Coca-Cola's launch of Surge helped energize Pepsi-Cola.

"Our system believes in Mountain Dew," a Pepsi spokesman said. "Surge psyched up our bottlers. They, as a whole, are really looking to make this product as big

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