PepsiCo has started a digital agency review for brand Pepsi in North America. The incumbent shop is Cheil Worldwide-owned Barbarian Group, which is trying to rebuild after a wave of personnel departures. It is unclear if Barbarian Group is defending the business. A PepsiCo spokeswoman declined to comment on the review. Barbarian Group representatives did not return requests for comment. Barbarian Group CEO Peter Kim left the shop on Sept. 1 after less than a year in the post. He took the helm last December, when former chief executive Sophie Kelly stepped down. His departure followed that of numerous Barbarian Group executives over the last six months. Cheil Worldwide President of International and CEO of Greater China Aaron Lau is serving as Barbarian Group's interim CEO.

1. NEW BUSINESS PITCH
The Joy of Pepsi-Cola

2. NAME BRAND PITCH TYPE
Digital Agency
MARKET DATE
September 17 , 2016
The Data You Need to Win This Pitch
DESCRIPTION
PepsiCo has started a digital agency review for brand Pepsi in North America. The incumbent shop is Cheil Worldwide-owned Barbarian Group, which is
trying to rebuild after a wave of personnel departures.
It is unclear if Barbarian Group is defending the business. A PepsiCo spokeswoman declined to comment on the review. Barbarian Group representatives
did not return requests for comment.
Barbarian Group CEO Peter Kim left the shop on Sept. 1 after less than a year in the post. He took the helm last December, when former chief executive
Sophie Kelly stepped down. His departure followed that of numerous Barbarian Group executives over the last six months. Cheil Worldwide President of
International and CEO of Greater China Aaron Lau is serving as Barbarian Group's interim CEO.
Brand Pepsi Begins
a Digital Agency
Review
th
North America

3. PepsiCo, Inc. is a worldwide food and beverage company. Its Frito-Lay
North America segment offers Lay's potato chips, Doritos tortilla chips,
Cheetos cheese-flavored snacks, Tostitos tortilla chips, branded dips,
Ruffles potato chips, Fritos corn chips, and Santitas tortilla chips.
The company's Quaker Foods North America segment provides Quaker
oatmeal, grits, rice cakes, oat squares, and natural granola; and Aunt
Jemima mixes and syrups, Quaker Chewy granola bars, Cap'n Crunch
cereal, Life cereal, and Rice-A-Roni side dishes.
The company's PepsiCo Americas Beverages segment provides beverage
concentrates, fountain syrups, and finished goods under the Pepsi,
Gatorade, Mountain Dew, Diet Pepsi, Aquafina, 7UP, Diet Mountain Dew,
Tropicana Pure Premium, Sierra Mist, and Diet 7UP brands; and
ready-to-drink tea and coffee, and juices.
FINANCIAL OVERVIEWCOMPANY BACKGROUND
MAIN COMPETITORS
2015 Net Revenues (mil)
2015 Employees
Employee Growth Percent
Assets (mil)
Net Income Growth Percent
Sales Growth Percent
63,056
271,000
-
-
-5%
-
Mr. Jeff Dec
Senior Director of Marketing,
Trademark Pepsi
Mr. Mic Zavarella
Senior Marketing
Director, Pepsi Brand
DECISION MAKERS by
jeff.dec@pepsi.com mic.zavarella@pepsico.com
Client Profile / Market

4. Soft Drink Industry
$43 Billion
ANNUAL GROWTH
2011-2016
-1.4%
- ibisworld.com -
- ibisworld.com -
42.5%
PepsiCo
27%
Coca-Cola
SOFT DRINK
MARKET SHARE
IN 2015
REVENUE IN 2015
CARBONATED SOFT DRINKS
Dr. Pepper Snapple
17%
Cott
4%
National Beverage
3%
Other
6.5%
- Statista.com -

5. Soft Drink Industry
1
0
Nonalcoholic Beverages: Volume Growth by Category (2015)
2%
3%
4%
5%
6%
-1%
-2%
-3%
7%
VolumeGrowth(%)
Coca-Cola
PepsiCo North America
Beverages
Dr Pepper Snapple
Sparkling Beverages Still Beverages
MARKET SHARE OF CARBONATED
SOFT DRINKS AMONG
LIQUID REFRESHMENT BEVERAGES
2015 2012
38.4%
42.4%

6. Fast Food industry in numbersGrowing Aversion for Soda in the U.S.
LOWEST LEVEL SINCE 1986
674 EIGHT-OUNCE
PER PERSONA PER YEAR
CSD CONSUMPTION IN 2014
SERVINGS
Thinking about the food you eat, for each of the following please say if it is something you actively
try to include in your diet, something you actively try to avoid or something you don’t think about either way.
How about soda or pop?
AMERICANS’ DIETARY HABITS OF DRINKING SODA
41
36
23
51
63
61
25
24
23
13
22
16
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Specified regular vs diet soda or pop in 2015, regular soda findings shown
- GALLUP -
% Include % Avoid % Don’t think about

7. Fast Food industry in numbersBack To Basics
Bottled water's core characteristics
– healthful, natural, zero-calorie –
are increasingly resonate with U.S. consumers
ENERGY DRINKS AND, ESPECIALLY, READY-TO-DRINK (RTD) COFFEE.
U.S. LIQUID REFRESHMENT BEVERAGE MARKET CHANGE IN VOLUME BY SEGMENT (2014 - 2015)
SEGMENTS % CHANGE 2014 / 2015
Ready-to Drink Coffee 16.5%
Energy Drinks 9.8%
Bottled Water 7.9%
Value-Added Water 7.5%
Ready-to-Drink Water 6.1%
Sports Beverages 5.5%
CSDs -1.5%
Fruit Beverages -2.1%
TOTAL LRB 2.8%
Source:BeverageMarketingCorporation
Gary Hemphill, managing director and chief operating officer of
research at the Beverage Marketing Corporation, expects bottled
water to surpass carbonated soft drinks by early 2017.
NON SPARKLING BOTTLED
WATER ACC0UNTED FOR
95.8% OF TOTAL 2014
WATER BOTTLES VOLUMES

8. PepsiCo.
PEPSICO’S REVENUES
IN 2015 WERE CLOSE TO
• • $63 BILLION • •
• PEPSI-COLA •
NATIONAL MEDIA SPENDING (2015)
• • $231.4M • •
30% of total PepsiCo’s 2015 media spending.
53%
FOOD
BEVERAGE
47%
56%
U.S.
OUTSIDE U.S.
44%
MIX OF NET REVENUES TOP BEVERAGE BRANDS PERFORMANCE
+ 11.4%
+ 5.2%
- 1.0%
- 3.9%

9. Fast Food industry in numbersHealthier Options
They’re marketing these smaller portions as better choices because of their
reduced quantity and fewer calories. These smaller packages also benefit the
companies since they have higher margins
Pepsi switched from aspartame to sucralose in it’s Diet Pepsi products
ASPARTAME FREE
The new product will have seven ingredients: water, organic cane sugar, citric
acid, organic natural flavor, sea salt, sodium citrate and potassium chloride. The
line, called G Organic, will come in Lemon, Strawberry and Mixed Berry flavors.
DIET PEPSI
SMALLER
PORTIONS
NON-GMO
TROPICANA
ORGANIC
GATORADE
PepsiCo started promoting its Tropicana brand as being GMO Free.
(even though Nasdaq pointed out that GMO oranges have never been available.)

10. Fast Food industry in numbersIntroducing the 1893 Line
“Craft is not a fad. It is here to stay. We think craft is a
critical growth space and we hope this is something we
will be talking about for years to come.”
Scott Finlow, VP of Innovation & Insights for
Global Foodservice @PepsiCo
"We were inspired by the mixology craze. We absolutely
see this as a perfect standalone beverage or a perfect
complement to cocktails."
Chad Stubbs, VP of marketing for the Pepsi
Trademark
THE COLA WITH
CRAFT VIBESThe 1893 cola is made with natural ingredients
Premium kola
nut extract
Real sugar
Sparkling
water
Premium kola
nut extract
Real sugar
Sparkling
water
Real Ginger

11. Fast Food industry in numbersCraft Soda Trend
PEPSICO’S CRAFT SODAS
In late 2014, PepsiCo launched Caleb Kola,
a craft soda containing sparkling water,
fair-trade cane sugar, and kola nut extract
This PepsiCo’s craft soda contains natural
flavors and sugarcane instead of
high-fructose corn syrup embraces more
offbeat flavors like agave vanilla cream, black
cherry with tarragon, and lemon berry açai
60% 33%
34% 44%
of US adults agree that
carbonated soft drinks made
with natural ingredients are a
better choice than drinks with
artificial ingredients
of US adults currently drink
craft sodas
are interested in carbonated
soft drinks with additional
benefits such as proteins,
vitamins, minerals
of non–craft drinkers
are keen on trying
craft products.
- Mintel - - Mintel -
- Mintel - - Mintel -

12. NATURAL
SODA
CONSUMERS
QUICK DEFINITION:
Natural Soda Consumers prefer better-for-you alternatives
to regular and diet sodas.
These consumers place importance on natural or real
ingredients and are interested in seeing carbonated soft
drinks with added benefits, such as protein, vitamins or
minerals.
10%
20%
0
30%
13-17
• • •
•••
18-24 25-34 35-44 45-54 55-69
64%
FEMALE
42%
SINGLE
36%
WITH CHILDREN
FOODIES
177.9
ART
APPRECIATORS
144.0
BEAUTY &
WELLNESS AWARE
170.2
FASHION
LOVERS
140.0

13. 38%
NATURAL SODA
CONSUMER
Compare the Natural Soda Consumer Demographic
with Pepsi’s Female Audience
Pepsi Cola’s
audience overlaps
with our Natural Soda
consumer
demographic by 38%
in interests,
including: Food, Art,
Beauty and Fashion

14. PEPSI
AUDIENCE CROSSOVERS
Pepsi’s audience are food
enthusiasts (foodies 178.9) but
are not interested in healthy
options.
They stand out as Snackers,
interested in Food-to-go and are
fans of Fast Food.
They are not interested in
cooking. Indeed food related
websites score low in popularity
(46.6).
NATURAL SODA CONSUMERS:
FOOD
THOUGHTFUL
EATERS
191.0POPULARITY
GRAINS &
PASTA
190.0POPULARITY
VISIT FOOD
RELATED
WEBSITES
30%
CLICK HERE TO SEE
TOP FOOD RELATED
WEBSITES

15. PEPSI
AUDIENCE CROSSOVERS
NATURAL SODA CONSUMERS:
BEAUTY & WELLNESS
Interest in Beauty &
Wellness is just slightly
above the average among
Pepsi consumers.
They don’t emerge as
Active & Fit people but
they are Cosmetic
Connoisseurs (pop 141.5)
and are interested in Face
Care products.
188.7
COSMETIC
CONNOISSEURS
SKIN CARE
184.5
ATHLETIC
APPAREL
130.5
TOP SKIN CARE BRAND
KNOW
MORE
163.2
ACTIVE
& FIT
DISCOVER THEIR
FAVORITE FITNESS ACTIVITIES
Burt’s
Bees

16. PEPSI
AUDIENCE CROSSOVERS
NATURAL SODA CONSUMERS:
ART
Pepsi audience is not at all
interested in Art
(46.0 pop index).
However, drilling down into the
book interests, Comics turned
out to be a form of art gathering
much interest among Pepsi
consumers.
ART
APPRECIATORS
144.0
COMIC BOOK
READERS
172.3
MUSEUM &
ART GALLERIES
112.3
COLUMBUS
MUSEUM OF
MODERN ART
KNOW
MORE
FAVORITE MUSEUMS
DISCOVER THEIR
FAVORITE ARTISTS
DISCOVER THEIR
FAVORITE ART EVENTS

17. PEPSI
AUDIENCE CROSSOVERS
Pepsi consumers are Swayable
Shopaholics; thus they are
interested in fashion but don’t
invest much time staying ahead
of the curve.
They are interested in Footwear
(pop 150.0) and and Athletic
Apparel (pop 137.9)
NATURAL SODA CONSUMERS:
FASHION LOVERS
EYEWEAR
153.3
HANDBAGS
& PURSES
160.2
ACCESSORIES
ADDICTED
187.5
• • • • • •
DISCOVER THEIR FAVORITE
RETAIL STORIES
CLICK HERE TO SEE THE FAVORITE
FASHION BRANDS

18. CONSUMER
INSIGHTS SUITE
Discover the Pepsi consumer
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