PEPSI THINKS YOUNG, ADVANCES SWETTE RISE FOLLOWS SUCCESS WITH NON-COLA BEVERAGES

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Does Brian Swette know what America's youth wants?

Gambling the answer is yes, Pepsi-Cola Co. last week named the 40-year-old executive as exec VP-marketing for all corporate activities. As senior VP-general manager of new-beverage ventures, Mr. Swette was responsible for the successful launch or rejuvenation of several non-cola drinks.

The move combines duties previously split between Mr. Swette and Jeff Campbell, who's leaving as senior VP-brand development. And though he's careful to talk about "building on the legacy of Pepsi marketing," Mr. Swette (pronounced SWEET-ee) is focused on change.

"We're going to develop products, packaging, merchandising ideas and world-class imagery to build our brands," he said. "I'm looking at every category and every consumer need. We'll meet those needs with our own brands if we can, but we'll also look beyond them to broaden our brands if necessary."

The consolidation of duties under Mr. Swette is part of major streamlining efforts parent PepsiCo is undergoing in several areas. The company last month forecast flat second-quarter earnings, in part due to pricing pressures on its beverage operations.

Pepsi-Cola has cut nearly 1% of its 30,000 jobs during the past 18 months, a spokeswoman said. "And more is planned, although nothing close to the rumors and speculation now going around of 20%."

Mr. Swette's challenges are many. Pepsi has been hit especially hard by growing private labels, now representing some 15% of the $50 million soft-drink market, because it's so dependent on grocery store sales. Rival Coca-Cola Co., by contrast, has a larger percentage of its business in fountain and vending machine sales.

Mr. Campbell succeeded in boosting volume for Pepsi's core brands: Pepsi, Diet Pepsi, Mountain Dew, Slice and Mug. All are up-some for the first time in years-the company said. But price cutting continues to thwart dollar sales gains for colas.

Cola alternatives, from water to iced teas to juice-based drinks to sports brands, account for nearly all beverage growth.

"Where is the beverage business?" asked Jesse Meyers, publisher of Beverage Digest. "It's gone from a dominant cola, carbonated, burp focus to a much more variegated world."

The boyish-looking Mr. Swette is a decade closer to the youthful audience that's defining that world than Mr. Campbell, 50. Said to be charismatic without being flashy, Mr. Swette "is a great listener," Mr. Meyers said. "He's a very unusual marketing guy, a great absorber."

Mr. Swette is identified with some of Pepsi's biggest successes, including the Pepsi-Lipton Tea Partnership's Lipton Original; All Sport sports drink; and the joint venture with Ocean Spray Cranberries. He helped created the 1-liter wide-mouth Big Slam bottle, which rolled nationwide in April, and the Cube, a 24-can pack (two layers of 12 cans) selling at the rate of 4 million a week, Pepsi said.

Though advertising is expected to get a new look with Mr. Swette's ascension, Pepsi-Cola isn't expected to stray from lead agency BBDO Worldwide, New York.

"Agency disharmony is [after] the last thing anyone should expect," Mr. Meyers said. "Everybody is extremely happy with BBDO."

Pepsi's current youth-oriented tagline, "Be young. Have fun. Drink Pepsi," is also expected to continue. But executives close to the company say there has been talk of an additional new theme that ties all brands together.

For his part, Mr. Campbell claimed to be satisfied with "a couple of years of good work" for Pepsi-Cola.

"I want to be running something again," said the former president-CEO of Burger King Corp. and former chairman of Pillsbury Co.'s Restaurant Group. For three years before joining Pepsi, Mr. Campbell owned and operated two full-service restaurants in North Carolina and Tennessee.

"My goal is to run a marketing driven company within six months, and I'd say that's very likely," Mr. Campbell said.

There's certainly no shame in leaving. Mr. Meyers said: "VP-marketing in the soft-drink industry is not a job to retire from. The fatality level is very high."

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