Marketing and consumer engagement
We plan to use our marketing expertise and understanding of consumers to promote healthier choices.
Positive power of marketing
Our company is built on vivid attractive brands, and marketing is one of our core skills. Our success relies on our understanding of consumers, what motivates them and what excites them. The UK is a global focal point for consumer interest in, and concern about, health and nutrition, obesity and chronic disease.
To be a responsible food manufacturer we need to use our expertise, skill and resources to market and promote healthier options.
Promoting healthier options
Tropicana and Quaker are rapidly growing parts of our business providing inherently healthy products: fruit juices and oats.
(Figure 13) Tropicana sales growth
Within savoury snacks, our work on innovation has allowed us to launch a range of healthier options, and support them heavily through our marketing expertise.
Walkers Baked was launched in September 2006 as a lower-fat alternative for people who like crisps. From 2004 PepsiCo has invested heavily in R&D and technology to allow crisps to be baked, rather than fried, reducing levels of total and saturated fat. Walkers Baked have 70% less total fat than regular crisps. Baked was supported by a multi-million pound launch, helping switch consumers towards healthier snacks with a £3 million+ marketing campaign.
In 2007, PepsiCo UK launched Sunbites, a new savoury snack, each portion of which provides one 16g serving of wholegrain. Sunbites were developed to meet the need to increase wholegrain consumption in UK diets while still controlling the fat level (which in Sunbites is 30% lower than standard crisps).
In February 2008 we launched Tropicana smoothies to complement our core not-from-concentrate juice range. Tropicana smoothies deliver the equivalent of two portions of fruit per serving, and provide an extra opportunity for consumers to vary their intake of fruit and vegetables.
But we know that our core brands, and our mainstream advertising and marketing budget, must also support healthier options. Since 2004 we have invested all of our above the line soft drink advertising, over £20 million, to support the growth of our no-sugar drinks: Pepsi Max and Diet Pepsi. This will continue in the future: all our Pepsi advertising will support the growth of our no-sugar or natural colas.
(Figure 14) Pepsi UK advertising spend: 2004-2008
This shift in our marketing focus has helped increase the total UK cola market share of zero-sugar Pepsi products from about 11% to about 13%, driven by growth in Pepsi Max.
(Figure 15) UK Sales 2008 - Regular Pepsi/7UP vs No sugar
Accessibility
It is important that healthier options are not simply promoted to an affluent minority, or sold at a higher price, which could widen health inequalities. We do not create any price differential between regular Pepsi and the no-sugar/ low-calorie variants. The recommended retail prices for Sunbites and Walkers Baked are also set at an affordable level for those on lower incomes. 55% of frequent Pepsi Max/Diet Pepsi buyers (over 1.3 million people) are from social class DE, and Walkers Baked is purchased by over 1.3 million DE consumers every month.
We know that accessibility is also based on retail availability - in other words, whether our healthier options are stocked in all types of retail outlet. Over the next three years we will work with our retail partners, and others, to widen the availability of Pepsi Max and Walkers Baked, and reduce the proportion of outlets where larger pack sizes are the only options available.
Artificial additives
Over the last few years there has been a growing consumer trend towards products using simple and natural ingredients and away from artificial additives. We have responded by implementing a programme to replace, over time, artificial additives with naturally sourced alternatives. By 2012 no Walkers crisps will contain artificial flavour enhancers, preservatives or colours. We have also launched new brands with 100% natural ingredients - Red Sky and Planet Lunch.
Marketing to children
PepsiCo UK has long been a supporter of responsible advertising. We stopped targetting advertising of our crisps, snacks and carbonated soft drinks to children in 2004. Since 2007 we have applied the OFCOM criteria on which products can be advertised to children across all of the marketing channels, including print and online, across our entire portfolio.
Our portfolio includes healthier products designed specifically for children, such as Tropicana Kids!, Paw Ridge and Planet Lunch. These products must meet strict nutritional criteria, including the FSA Nutrient Profile model, and are only marketed to over 8s, although primarily at their parents. Any marketing activity ensures that the inexperience of children is not exploited, the authority of parents is not undermined and children are not encouraged to persuade their parents into purchasing products.
Globally, PepsiCo demonstrates its commitment to responsible marketing through a number of industry groups including: the Consolidated ICC Code of Advertising and Marketing Communication Practice; the International Council of Beverages Associations (ICBA) Commitment; the UNESDA commitment; and the European Pledge.
(Figure 18) Advertising to children
Engaging children on healthier products
Every parent knows that diet, alongside physical exercise, is critical for children's health and development. Obesity rates among British children are at record levels, and predicted to rise. Addressing the problem will require action from government, industry and parents.
Creating nutritious meals that children enjoy is not always simple. Foods that attract children can often be high in fat, salt and sugar, and contain artificial additives.
We recognise our responsibility to use our expertise to help parents encourage children to enjoy healthier food at mealtimes. This is why we launched the children's breakfast cereal, Paw Ridge, and the children's lunchbox range, Planet Lunch.
Paw Ridge
Launched by Quaker to meet demand from parents for healthy breakfast cereals, Paw Ridge is a convenient porridge developed for children. Unlike traditional Quaker oats, Paw Ridge porridge oats are finely milled to create a smoother, creamier texture that appeals to children.
The Paw Ridge range contains all the benefit of oats - a valuable source of wholegrain and fuel for the day - and contains no artificial colours, flavours or preservatives. Paw Ridge also meets the FSA's Nutrient Profile model used to control which products can be advertised to children.
To help encourage children to enjoy porridge, the Paw Ridge brand has been developed with five cartoon characters, with which children can interact via the Paw Ridge website.
Planet Lunch
Encouraging children to eat a healthy, balanced and filling lunch, particularly at school, has traditionally been a challenge for parents.
The new Planet Lunch lunchbox range was developed with parents in mind, to help them encourage their children to enjoy a healthy, balanced lunch, wherever they are. The Planet Lunch products, as well as their branding and packaging, are designed to appeal to children while still meeting strict nutrition criteria.
As with Paw Ridge, the entire range fulfils the FSA's Nutrient Profile model and is low in salt, added sugar and fat. It is made with 100% natural ingredients and includes servings of fruit, wholegrain and fibre.
The Planet Lunch website contains full product information, guidance on healthy eating and suggestions of ways to make a nutritionally balanced lunch box.
The launch of Planet Lunch was supported by a full marketing campaign and we have worked closely with retailers to position the range in the fruit snacking aisle in stores, where we know parents go to find healthy accompaniments for their children's lunches.
Launched in 2009, we have committed to supporting the range to grow further in 2010.
Climate Change and Public Health
The twin challenges to society of climate change and health are inextricably linked. The disruptive effects of man-made climate change won't simply impact our planet, local environment and supply chain; they will directly affect the health of individuals and families in both the global South and global North.
When rising temperatures cause sea-level rises, disruptive and more extreme weather patterns and flooding, crops fail and the conditions for disease spreading become more favourable. According to the Climate and Health Council, of which PepsiCo is a founding member, rising temperatures will lead to over 60,000 deaths each year. As sanitation deteriorates, and access to water becomes scarcer, killer diseases like malaria, under-nutrition and diarrhoea will become more widespread.
Over the last few years several key fruit and vegetable crops in the UK had their worst yield for a number of seasons because of adverse weather conditions. Over time, events like this will affect the nutritional intake of UK households and make buying essential food stuffs more expensive. Our own business is also likely to be impacted. For example a recent failure of the Sanguinello orange crop in Sicily, our only source for that variety, damaged our sales of fruit juice and delivery of vitamin C.
Acting on climate change through reducing our personal carbon footprints brings health benefits. Lower emissions delivery will reduce emissions resulting in cleaner air and fewer asthmatic and other respiratory diseases. When we act on climate change together, the health benefits for us individually and the environment are clear.
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