Pepsi launches local herbal, fruit drinks in Russia

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MOSCOW--After 25 years in the Soviet Union, Pepsi-Cola Russia is launching its own version of local herbal and fruit drinks under the Baikal and Tarkhun names.

The company is attempting to capitalize on the enduring popularity of Russian soft drink brands among young people and woo them with better quality products, packaging and advertising.

Baikal and Tarkhun drinks have been produced in Russia for more than 30 years by some 100 bottling plants and they're still as popular as those of international rivals Pepsi-Cola and Coca-Cola.

According to market researchers Gallup Media, Tarkhun's and Baikal's brand awareness is 60% and 50% respectively, compared with Coke and Pepsi's at 60% and 55%.

Pepsi Marketing Manager Sergey Stepanov says changes in the marketplace have driven the company's latest move into local products.

"One can clearly see that, with the development of the market, many people here, including the most dynamic segment -- Russian youth -- tend to buy a Soviet trade mark like Kolokolchik or Tarkhun".

Pepsi has bought the license to bottle the traditional brands from drinks recipe owner Napitok. Pepsi will add the name Fiesta to the Baikal and Tarkhum bottles.

Pepsi claims it's not afraid to enter the new sector of herbal drinks here and to bottle lemonades produced under the same names by localcompetitors. "The blind tests we made among our consumers show we make drinks of superior quality [which] may even exceed [those of] local competitors," says Mr. Stepanov.

The new drinks will be promoted primarily via TV commercials and point-of-sale materials.

Copyright February 2000, Crain Communications Inc.

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