In recent posts, we’ve talked about the need for PepsiCo to continue with its efforts of advertising its legacy brands such as PepsiCola, Mountain Dew and Gatorade even in the face of the “Sugar Screaming” crowd. Those efforts have now paid off.
PepsiCo increased its spending on advertising and marketing during the last few months (reversing their earlier tendency to pull that funding in preference to “new brands”). And, just like magic, sales increased in the latest quarter for those brands in addition to the company’s ready-to-drink Starbucks coffee. It’s reported that company officials came to realize that they had shifted too much advertising money and shelf space to the new brands such as flavored seltzer brand Bubly. Big surprise there. As a result, the marketing expenses for their legacy brands rose by 6% during the last quarter. Kudos to PepsiCo for thinking carefully about their processes rather than just shooting from the hip in an effort to placate the latest round of “screamers.” That’s what is called managing change and taking care of business!