There will be no Robert Young calming caffeine-driven tempers with a cup of Sanka, but Pepsi-Cola Co. is investing $100 million in the biggest promotional campaign the firm has undertaken for a new product to sell a caffeine-free cola, Pepsi officials said today.
Pepsi Free will go into eight test markets this year with two versions: regular 99.7 percent caffeine-free, and one that's also one calorie and sugar-free.
Although Pepsi-Cola Co. President John Sculley said the company is uncertain about the size of the caffeine-free-cola market, Pepsi's research revealed a large market, particularly among young people, for the drink.
"We are aiming for the Pepsi Generation," Sculley said. "But there is a high awareness that soft drinks have caffeine, and consumer research indicates that 5 to 15 percent of the market wants a caffeine-free cola."
The move comes as Philip Morris--which makes 7-Up--launches a national campaign for Like, a 99-percent-caffeine-free cola, with a more aggressive campaign than Pepsi's, going beyond caffeine-free to anticaffeine.
With regular Pepsi-Cola as its mainstay, Scully said his company is not about to adopt such an advertising line. "We wouldn't do that because there is no scientific support for the claim that there is a health issue with caffeine," Sculley said.
Pepsi officials won't disclose the precise caffeine content of Pepsi, although they do claim that six 12-ounce cans of the product provide the caffeine equivalent of one cup of coffee.
Pepsi Free's campaign will avoid the health issue, Sculley said. "This one says you get Pepsi taste, and it's caffeine-free. Our experience is that you do a lot better when you have something positive to say."
Pepsi officials hope the new product's growth will mirror the boom in diet colas, a business that has grown from less than one percent of the market in 1962 to close to 20 percent today. Sculley also likened the market to the decaffeinated-coffee market, which also has ballooned in recent years to nearly 20 percent of coffee sales.
John C. Maxwell Jr., a leading beverage analyst with the New York securities firm Lehman Brothers Kuhn Loeb Inc., notes that Philip Morris' 7-Up advertisements using the phrase "never had it, never will," referring to caffeine, prompted Pepsi's move. " 'Seven Up' " got the whole thing going," he said.
Maxwell said he was surprised at the scope of the Pepsi campaign. "Maybe they see something out there I don't, but so far there hasn't been a big market out there," he said. Royal Crown's caffeine-free RC 100 sold just over 15 million cases out of the 6.2-billion-case cola industry, Maxwell said.
According to Maxwell's figures, cola accounts for 62 percent of the soda market, a total of 3.8 billion cases a year. Pepsi accounts for about 25.1 percent of that market, below Coca-Cola's 34.5 market share.
But industry sources said that Coca-Cola Co. also is making noises about a new market strategy, and is planning to announce a new product, Diet Coke, on Friday. Like Coca-Cola's Tab drink, Diet Coke will contain caffeine, at least in its testing phase. "Somewhere along the line, they want to be in a position to take the caffeine out," Maxwell said.