REPORT: 'POWER OF ONE' YIELDS PAYOFF AT PEPSICO: PAIRING SNACKS, SOFT DRINKS IN GROCERY AISLES BOOSTING SALES

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The "Power of One" is becoming more than a PepsiCo catchphrase.

Ten months after putting an executive in charge of its initiative to leverage the combined strength of its Frito-Lay snack foods and Pepsi-Cola beverages, the marketer is said to be realizing results.

Although the phrase has been around for a few years at PepsiCo, it was taken more seriously after the company spun off its fast-food chains.

Jennifer Solomon, an analyst with Salomon Smith Barney, said soft-drink and snack sales in one supermarket jumped 21% after PepsiCo tinkered with displays to create a "profit aisle."

The aisle, a major tactic in Power of One, jointly merchandises snacks and soft drinks down and between both sides of a grocery aisle.

While chips and soda may appear to be an obvious marriage, the two are paired in only 40% of U.S. supermarkets. Ms. Solomon said PepsiCo has found that with no special marketing efforts at joint promotions, the profit aisles add 4 points in soft-drink sales growth and 3 points in salty snacks.

The company is adding these aisles to more than 70 individual supermarket locations in the next few months. That's a small number in the universe of U.S. supermarkets, but a significant measure of PepsiCo's care with the strategy, Ms. Solomon said.

PROCESS THAT TAKES TIME

"This process really takes time. The mistake Pepsi's made in the past . . . was to kind of gear up on things and then not stick with it," she said.

The initiative gives PepsiCo an edge over archrival Coca-Cola Co., which doesn't have salty snacks in its portfolio.

"Power of One is all about leveraging the fact Pepsi accounts for an average 3% of supermarket sales," Ms. Solomon said, who noted in a recent report that Coca-Cola represents a 1.8% share of supermarket sales.

Coca-Cola couldn't be reached at press time.

The executive in charge of the Power of One market activities is 18-year Frito-Lay veteran Al Carey, who as senior VP-retailer strategies reports to PepsiCo Chairman-CEO Roger Enrico.

It's unclear how the Power of One strategy will play out in advertising strategy. But a company spokesman said PepsiCo has been taking steps to "add one plus one and get three."

Last month, the company moved media buying duties for its acquired Tropicana

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