Cracking The Code For Pepsi

Everyone knows that Cie Nicholson talks very, very fast. Her team members describe it as machine gun fire, the kind that stops a person right in their tracks. They say her lips aren't capable of keeping up with the flow of words.
As a vice president of the Mountain Dew brand, Nicholson not only had to talk, but act-decisively-to capitalize on market forces during the stealth launch of its cherry-flavored entry, Code Red, and create the proper momentum for the discovery brand. To the amazement of everyone but Nicholson's team, the drink became a huge success, and is well on its way to reaching 100 million case sales in its first full year.

"Code Red provided a wake-up call to other soft drink companies to get their innovation on track," said John Sicher, editor of Beverage Digest, Bedford Hills, N.Y.

Clearly, Nicholson, 38, (whose first name is pronounced SEE) had to move fast to stay ahead of No. 1 Coca-Cola. "There's not a move we make that they don't make," she said." We had Pepsi Twist. They had Diet Coke with Lemon. Then there was Aquafina and they did Dasani. It's like a chess match only with huge brands worth millions and millions of dollars. There aren't too many other categories like this-airlines, quick service restaurants E It's very fast paced. It's real time. It's happening."

Neither are there as many success stories in the world of soft drinks as Code Red's under Nicholson, who is on the Pepsi fast track, having recently been promoted to vp-flavors for Pepsi-Cola North America.

In the first half of 2002, the drink locked up a 2.7 share in the convenience channel (delis, gas stations, etc.) with volume up 144%. It is the eighth most popular soft drink, between Diet Pepsi and Diet Mountain Dew.

What's more, the brand is helping to grow Pepsi's overall carbonated portfolio. In supermarkets, where Code Red has a 0.9 share, Pepsi's portfolio of carbonated soft drinks are up 4.9% compared to 1.1% for full year 2001. In convenience stores, its overall share is up 5.4%, which is on par with last year.

Before Code Red's launch, anything with bubbles really wasn't capturing consumers' attention, as most carbonated beverage sales were either flat or in decline. The new drink not only spurred interest in a sagging category, it helped extend Pepsi into the all-important urban market with an unlikely brand that historically had hillbilly roots.

Since its inception, the market has been flooded with flavored rivals: Vanilla Coke, Dr Pepper Red Fusion, Diet Coke with Lemon, Pepsi Twist, dnL, the rebirth of Fanta-and now Pepsi Blue.

"It launched a new wave of product development in the soft drink category. I don't think there's any question about that," said