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MarketScreener Homepage  >  Equities  >  Nasdaq  >  PepsiCo, Inc.    PEP

PEPSICO, INC.

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PepsiCo Redesigns the Two-Liter Bottle for an Easier Pour

11/20/2020 | 04:31pm EST

By Katie Deighton

PepsiCo Inc. has redesigned the two-liter bottles in which it sells its drinks on store shelves in North America, replacing the familiar cylinders with more sculpted shapes.

The company's largest consumer bottle now curves inward around two-thirds of the way down the container, with ridges carved in that are meant to echo the visual identity of each beverage's branding. Pepsi's indents mirror the curves of its globe logo, for example, while Mountain Dew's new bottle features mountainous jagged lines.

Although the aesthetic may be flashier, the new bottle also was redesigned to make it easier for soda drinkers to use, executives said.

A company audit of its packaging in 2018 found that some consumers considered the old PepsiCo bottles generic and outdated. Soda rival Coca-Cola Co. had added its distinctive contour to its two-liter bottles in 2009; PepsiCo's two-liter bottles, meanwhile, "had no significant brand features," according to Andy Payne, the global chief creative officer of Interbrand, a branding consulting firm.

But PepsiCo also reported that some people had trouble gripping and pouring soda from the two-liter bottle that was then in use, said Emily Silver, vice president of innovation and capabilities at the company's North American beverages unit.

The research showed that women, whose hands tend to be smaller than men's, sometimes found it difficult to pick up and balance a completely round, larger bottle with one hand. Older soda drinkers who are losing strength in their hands also had trouble gripping the old bottle, and even people with no ailments sometimes dropped it when it was wet, PepsiCo's research team found.

"Gripability, and the ability to pour easier as you are sharing with your family, are pain points that I think we've dealt nicely with in this new version," Ms. Silver said. The bottle's ridges add surface friction for a better hold, and the tapered dip measures 10.4 inches in circumference, a size that 90% of consumers tested found more manageable than the previous 13.4-inch bottle, she said.

It took PepsiCo almost three years of research, development and consumer testing to get to this point. Once the company had established the two-liter bottle warranted a new look, its design team drafted up thousands of sketches, said Mauro Porcini, PepsiCo senior vice president and chief design officer. These eventually turned into hundreds of 3-D printed prototypes that all had to be tested for structural integrity when filled with carbonated liquid.

Mr. Porcini, meanwhile, had to make sure the new bottle wouldn't cost PepsiCo too much to produce at scale.

"If I do absolutely anything to change any part of the bottle, I'm going to impact the cost of this product in dimensions that are difficult to quantify," he said. "Absolutely everything needed to be calculated."

PepsiCo declined to discuss the cost of the bottles or the redesign project, but said it was one of its largest redesigns in recent company history. The new bottles will have minimal impact on the efficiency of PepsiCo's manufacturing lines, a spokeswoman said.

The company ultimately hopes the new bottle design will help it sell more soda. PepsiCo held a 29.4% dollar share of U.S. carbonated soft drink sales at retail, including grocery and convenience, for the first nine months of 2020, according to the industry tracker Beverage Digest. Coca-Cola led the industry with a 40.9% share during the same period, Beverage Digest said.

PepsiCo thinks consumers will get used to -- and then expect -- an easier pouring experience from big bottles, and consequently buy more from its two-liter portfolio, said Mr. Porcini. The new design also will help sales by catching shoppers' eyes and expanding branding on the package beyond the label, he said.

One design expert criticized PepsiCo, however, for investing in yet another plastic item at a time when consumers are looking for alternatives.

"Pepsi has achieved an ergonomic and brand triumph: a bottle that's easier to use with subtle brand expressions," said Vicky Bullen, chief executive of brand and design agency Coley Porter Bell. "What it hasn't achieved is a significant reduction in plastic at a time when that should have been a significant priority."

PepsiCo said the new bottle uses the same amount of plastic as the old two-liter flask, but there is less plastic in the label.

The company has goals of using 35% less virgin plastic in its beverage business by 2025 and making 100% of its packaging recyclable, compostable or biodegradable, up from almost 90% in 2019.

Its Lifewtr drinks are sold in 100% recycled plastic bottles, and its bubly sparkling water line is now packaged only in aluminum cans, a company spokeswoman said.

Write to Katie Deighton at katie.deighton@wsj.com

(END) Dow Jones Newswires

11-20-20 1630ET

Stocks mentioned in the article
ChangeLast1st jan.
CURVES HOLDINGS CO., LTD. 3.68% 816 End-of-day quote.5.84%
PEPSICO, INC. 1.16% 141.8 Delayed Quote.-4.38%
SILVER -0.77% 25.2304 Delayed Quote.-3.86%
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Financials (USD)
Sales 2020 69 554 M - -
Net income 2020 7 384 M - -
Net Debt 2020 34 838 M - -
P/E ratio 2020 26,6x
Yield 2020 2,83%
Capitalization 196 B 196 B -
EV / Sales 2020 3,32x
EV / Sales 2021 3,15x
Nbr of Employees 267 000
Free-Float 74,0%
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Number of Analysts 25
Average target price 153,73 $
Last Close Price 141,80 $
Spread / Highest target 19,2%
Spread / Average Target 8,41%
Spread / Lowest Target -4,80%
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NameTitle
Ramon Luis Laguarta Chairman & Chief Executive Officer
Hugh F. Johnston Vice Chairman, Chief Financial Officer & EVP
Rene Lammers Chief Science Officer & Executive Vice President
Seth Cohen Chief Information Officer & Senior Vice President
Daniel Lucius Vasella Independent Non-Executive Director
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