Pepsi targets millennials as soda sales continue to slip

The biggest consumers of Pepsi, and other popular PepsiCo beverage brands like Mountain Dew and 7Up, are usually older, aged 45-65. Image: Pepsi, Twitter

Pepsi is launching its latest limited edition soda, a cinnamon-flavored cola called Pepsi Fire, according to Grocery Headquarters. The taste is reportedly borrowed from a soda that had been available in Thailand, Mexico, Singapore, the Philippines, Vietnam and other countries, TheStreet reported.

Also read, Coca-Cola partners with chefs and foodies to help stimulate sales.

Pepsi has been releasing limited edition sodas for years, and dozens have been introduced around the world to appeal to local tastes. U.S. consumers are particularly fond of cinnamon in beverages — from alcoholic drinks like mulled wine and cider to hot drinks like lattes and chai tea. It also has retro, artisanal appeal, according to flavor company Virginia Dare, which last year predicted a rise in the use of comforting flavors, including cinnamon.

The launch coincides with a broader promotion on Pepsi product packaging that allows customers to win Snapchat prizes such as filters and lenses by pointing the Snapchat camera at an on-pack Snapcode and scanning it. This can also be done to unlock a Pepsi mobile game that enters the user in a sweepstakes, with prizes including gaming consoles, a trip to Lollapalooza or a meet-and-greet on CONAN.

Pepsi's integrated Snapchat promotion also could attract a new generation of consumers. The social media platform is used by just 18% of U.S. consumers, but it’s a disproportionately young audience, with 45% of Snapchat users aged 18-24. The biggest consumers of Pepsi, and other popular PepsiCo beverage brands like Mountain Dew and 7Up, are usually older, aged 45-65, according to InfoScout data.

As U.S. soda sales decline, PepsiCo has been trialling a range of strategies to attract new consumers, including launching a line of fountain craft sodas and virtual reality-based content for Mountain Dew in 2015. The company has also shifted much of its focus to better-for-you products in recent years, but with 15% of its profits still coming from soft drinks, it has good reason to innovate in ways that appeal to its loyal customer base, while trying to attract younger demographics.​

It will be interesting to see if this kind of marketing will become more popular with legacy brands, some of which are losing market share to smaller, trendier upstart brands that perform well with millennials. Consumers' reaction to the cinnamon-flavored soda will also be telling. As soda sales struggle, many major manufacturers have begun to mimic the unique flavor profiles seen in the craft soda space to lure young people to their products, but only time will tell if this grows long-term interest and loyalty.

The soda will be available for an eight-week period from May 22 to July 16. A limited edition Pepsi Fire Slurpee drink also will be available at 7-Eleven stores until the end of June.

SOURCE Caroline Macdonald, Food Dive