PepsiCo offers new snacks, drinks with Whole Foods Market
By VINNEE TONG
AP Business Writer
NEW YORK — PepsiCo, the global snacks and soft drink company, is introducing new products through Whole Foods Market stores, targeting the type of consumer who shops at the growing natural and organic foods seller.
Purchase, N.Y.-based PepsiCo Inc. now sells a line of chips and has started market tests of a smoothie drink at certain Whole Foods locations. Neither makes any mention of PepsiCo on the labels.
The company declined to say whether other PepsiCo products were being sold through Whole Foods or whether additional ones were planned.
PepsiCo is selling the smoothie drink, Fuelosophy, at Midwest and Northeast Whole Foods locations, introducing a product that could help it capitalize on its growing non-carbonated beverage business. Fuelosophy’s launch comes after a PepsiCo chip line, Sun Snacks, was introduced at Whole Foods locations several months ago and is now sold at most locations, Whole Foods spokeswoman Kate Lowery said.
The initiatives are part of a PepsiCo strategy to diversify its brand portfolio to include a growing number of products targeted at health-conscious consumers.
PepsiCo has also used acquisitions to increase its presence in the healthy foods category, buying the companies that make Izze sparkling juice drinks, Stacy’s Pita Chips, and Mother’s Natural Cereals. All three products were sold in Whole Foods stores before PepsiCo bought them and will continue to be.
Customers of Whole Foods — started as a single store in Austin, Texas, that has grown to 189 stores in the U.S. and Britain — tend to be early adopters and respond less favorably to mass marketing techniques, Beverage World Senior Editor Jeff Cioletti said.
Fuelosophy’s Web site does not include any mention of its parent company. Cioletti said it makes sense that PepsiCo has not done any splashy product launch.
“It seems like Pepsi is walking a very fine line,” he said. “Today’s consumers are very, very suspicious of heavy marketing.”
PepsiCo spokeswoman Nicole Bradley said the company is not the first to remove its name from products to target a certain type of consumer, and cites The Coca-Cola Co.’s Odwalla smoothie drinks and Kellogg Co.’s Kashi cereal.
“We just decided to use a different model with this brand, a slower approach to let consumers discover it,” Bradley said.
PepsiCo, the second biggest U.S. soft drink maker after Coca-Cola, also owns the Frito-Lay snacks business and Quaker foods. Its major brands include Gatorade, Tropicana orange juice, Doritos, Sun Chips and Fritos.
The company has increased efforts to make its existing products healthier and offering new “good-for-you” ones. It has eliminated trans fats in certain snacks, introduced a new line of fruit-and-vegetable chips and made acquisitions in an effort to offer more non-cola drinks.
“Pepsi has really been committed to more healthful beverages,” Cioletti said. “It’s easy to associate them with cola, but they’re about a lot of things. That’s where the market is going, and this is one more part of that strategy.”
PepsiCo also sells Aquafina water and in July announced a partnership with Ocean Spray Cranberries Inc. to co-develop new products.
Its shares fell $1.16, or 1.9 percent, to $61.39 in afternoon trading on the New York Stock Exchange. They have traded in a 52-week range between $56 and $65.99.
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