Suntory sparks Pepsi revival in Japan

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TOKYO -- Pepsi Cola took its first significant bite into Coca-Cola's dominance in the Japanese marketplace in more than 30 years by capturing more than 10% of the market for supermarket sales in March. The jump is due to Japanese beverage maker Suntory Ltd. taking over domestic marketing from PepsiCo Inc. earlier this month and a stepped up advertising campaign.

Pepsi typically held a 7-8% share of supermarket sales in Japan prior to Suntory acquiring rights to be the sole retail agent in Japan for Pepsi last October.

According to a survey conducted by the Nihon Keizai Shimbun, a financial daily, Pepsi's share of sales at supermarkets was just over 7% for the first two months of the year. Suntory took over distribution on March 3 and by March 16, the market share had climbed to 11%.

Suntory officials confirmed the results of the newspaper survey.

Coke had a market share in Japan of 84.7% in 1997, but as of March 16 of this year Coke's share fell to 79.5%, the paper said.

The paper said Coke hurt itself by announcing a price increase for its beverages in March which would increase the price of a 350 ml can of Coke from 82 cents to 89 cents.

Suntory's assault on the cola market started with a makeover of Pepsi's cans and bottles in Japan. Blue was used as the base color as silver and red touches were added for a slick and modern look.

Suntory has also used the Pepsiman character in its advertising. The character was created by Industrial Light & Magic and it is a computer animation of a shimmering superhero who is always ready to quench the thirst of young, parched people. Ads were made by the production house Index.

Suntory plans to increase Pepsi advertising spending by about 30% over the next few years but did not release any figures for ad spending amounts.

Suntory plans to increase the number of vending machines selling Pepsi products by about 100,000 to bring the total in Japan to 400,000.

Pepsi hit the ground running in Japan when it entered in the 1960s. It had about a 20% share of the cola market at first, but slowly lost out to Coke.

Copyright April 1998, Crain Communications Inc.

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