PEPSI SEES CITRUS APPEAL IN ITS CRYSTAL

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The future of Crystal is anything but clear.

The reformulated version of Pepsi-Cola Co.'s failed Crystal Pepsi, now with "a citrus cola taste," is just hitting store shelves nationwide. The "Pepsi" name is gone from the brand, though the tagline says, "From the makers of Pepsi."

Pepsi is hoping to tap into the growing citrus-based soft-drink segment, led by brands such as Pepsi's Mountain Dew and Dr Pepper/Seven-Up Cos.' 7UP. Crystal is now targeted to teen-agers and Generation X.

But the company is taking its time to introduce the product. Individual bottlers are starting to run free standing inserts, and special in-store promotions are scheduled for convenience stores and gas stations this summer.

In March, a TV spot from BBDO Worldwide, New York, ran in four of Crystal's initial markets-Pittsburgh, Washington, Baltimore and Norfolk, Conn. But there are no further ad plans from Pepsi-Cola for the summer.

"We want to phase in the introduction through the bottlers in each market," said a Pepsi spokeswoman. "We're definitely committed to the brand and consider it part of our core portfolio. But we don't plan any big splashes this summer."

Pepsi's cautious approach is understandable. Crystal Pepsi was launched in January 1993 with a $40 million ad budget and major hoopla, only to fizzle among consumers who had grown disenchanted with clear sodas.

"For whatever reason, Pepsi likes the idea of Crystal," said Manny Goldman, beverage analyst at PaineWebber, San Francisco. "The question is where does it fit?

"Mountain Dew and 7UP are both significant brands, with about 5% each of the $50 billion soft-drink market, and of course, colas are the bulk of the market, even if they're no longer growing rapidly. So if Pepsi can get the best of both worlds with a citrus cola, they would accomplish something. But that's a big if."

Others are hoping to get in on the citrus soft-drink segment.

Coca-Cola Co. and agency Wieden & Kennedy, Portland, Ore., have put together a quirky ad campaign for the company's entry, OK, now available in eight markets.

Wieden has created at least five TV spots and an extensive print effort that imagines odd, sometimes surreal "coincidences" linked to the drink. A spot called "Coincidence No. 75" tells the story of a dog in Oklahoma who "barfs" on a neighbor after lapping up the drink. Wieden has also created translucent outdoor ads that are expected to be slapped over other outdoor ads.

Indigestion apparently is seen as an appealing subject for younger consumers.

Royal Crown Cola Co. and start running five 15-second TV spots in seven markets for citrus-based Kick, the brand's first ads in years. The estimated $1 million campaign directly attacks Mountain Dew. In one spot, a Mountain Dew can is shaken and opened, producing a fizzy sound. When Kick is opened, a loud belch can be heard.

Mountain Dew has been selling particularly well, analysts say. Sales rose 14% for the regular version and 4% to 5% for the diet product in the second quarter, compared with the same period a year ago, Mr. Goldman said.

Mountain Dew, which spent $24.5 million in advertising last year, is handled by BBDO Worldwide, New York.

7UP is seen as slightly more vulnerable. Sales for regular 7UP were up about 5% in the second quarter but down about 2% for Diet 7UP. The brand also just lost Exec VP-Marketing Russ Klein to Bayer Bess Vanderwarker, Chicago. Leo Burnett USA handles 7UP, which spent $30 million in advertising last year.

PaineWebber's Mr. Goldman questioned Pepsi's Crystal launch as "amorphous. Does this product have an identity? We'll have to see how Crystal evolves."

But others say Pepsi's indecisiveness is just the point.

"Fruit-based New Age soft drinks are growing tremendously overall," said Roy D. Burry, beverage analyst at Kidder, Peabody & Co., New York. "With Crystal, Pepsi is just trying to keep its toe in the waters" without risking too much.

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