Pepsi moves new Storm into broad battlefield

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The non-cola wars are heating up as Pepsi-Cola Co. expands test markets for new Storm, its latest rival to Coca-Cola Co.'s fast-growing Sprite.

Pepsi-Cola, buoyed by stronger than anticipated test-market results, is set to announce today that it's broadening Storm's distribution from three sites in Colorado to northern California, Nevada, Nebraska, Indiana, Milwaukee and Philadelphia.

"Take your thirst by storm," is the theme of the advertising for the lemon-lime soft drink, from BBDO Worldwide, New York. The creative is targeted to teens and adults, and includes one TV spot, radio commercials, outdoor boards and point of purchase.

There will be extensive sampling and special events to back the market introductions.


With Storm, Pepsi-Cola is trying to gain a bigger share of the strong lemon-lime segment of the estimated $54 billion U.S. carbonated soft-drink market. Beverage Marketing Corp., a beverage consultancy, pegs lemon-lime at a 12.5% to 13% share of market.

Storm is viewed as a rival to Sprite and Cadbury Schweppes' struggling 7 UP brand. As a point of differentiation, Storm contains caffeine--the same amount as in Pepsi--while Sprite and 7 UP do not.

Those products are in a different segment than the so-called heavy-citrus drinks such as Pepsi's more highly caffeinated Mountain Dew and Coca-Cola Co.'s new Surge.

Pepsi-Cola bottlers currently serve as third-party distributors for 7 UP in many U.S. markets. Beverage industry watchers have speculated that Storm is Pepsi-Cola's bid to oust 7 UP from its distribution system in favor of its own lemon-lime product.

A Pepsi-Cola spokesman said that in the Storm test markets 7 UP has not been displaced, but added the marketer has withdrawn the lemon-lime version of its Slice brand in those areas.

That product has had little marketing support and was left out of a revamp of its Orange Slice flavor.


The company declined to provide specific sales results from Storm's continuing test in Denver, Pueblo and Colorado Springs, Colo. Dawn Hudson, senior VP-marketing of flavor brands, new products and joint ventures, said in a statement that the results "exceeded our most ambitious expectations."

Gary Hemphill, VP-information services for Beverage Marketing, called Storm a "hugely important" product for Pepsi-Cola.

"Lemon-limes are the second-largest flavor category. It's potentially very significant," he said. "They really haven't had a meaningful viable lemon-lime entry."

Beverage Marketing ranks Sprite as the No. 5 soft drink in the U.S., with a 6% share, and puts 7 UP at No. 8, with a 2.2% share.

Copyright July 1998, Crain Communications Inc.

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