The Shopping Cart Economist

Wow - I haven’t been back here in awhile, and I am sorry for it. I miss blogging over here, but with hubby still deployed, writing has been on a back burner. However, this topic swelled up in my mind and I wanted to tackle it because I am fascinated by what I’m assuming is the thought process behind Pepsi Throwback - made with real sugar!

In my quest to limit how much soda I drink, I’ve stopped keeping it in the house. This isn’t to say I’ve stopped buying it, but I make it a little more painful to do by buying it one bottle at a time and paying the higher cost for it in a convenience store or a restaurant.

Yesterday, I stopped at 7-11 to buy a bottle and saw they had a coupon for “Pepsi Throwback” - made with real sugar. The coupon was for a free bottle of Pepsi Throwback or Mountain Dew Throwback when you buy any two other Pepsi products.

I bought the three bottles, got in the car, opened one, took a big sip, and almost spit it out! For the life of me, I don’t recall Pepsi tasting that way. In fact, it was so much less sweet than a regular Pepsi that I thought for a moment I was drinking diet soda. The calorie count however was still the same.

Either they weren’t using enough sugar, or my taste buds have been deadened to real sugar by its high fructose corn syrup counter part.

So, putting my shopping cart econ hat on here, I got to thinking about this today. Here’s my theory on why this product is on the shelf.

Pepsi got its patent in June of 1903. So it’s not like this is some 100-year anniversary party they’ve decided to have. And Pepsi, like Coke, has been using high fructose corn syrup since the 1980s as a cheap sweetener to flavor its beverages.

The reason for the sudden interest in the old Pepsi formula (complete with the old Pepsi Wave logo)?

My unadvised answer is that Pepsi has some really good long-range planning executives on the team, as well as a CEO that sees healthy food marketing as the future of Pepsico. This is no more than a market test to move Pepsi back into the sugar-based soda market.

I think Pepsi is being shrewd and is going to recreate itself in the space of being a natural foods advocate, aligning itself with moms, nutritionists, school cafeterias, cardiologists, and a dozen-plus other lobby groups that see soda as the bane of the US existence.

I also think they see several tides on the horizon including:

* A beverage tax levied against beverages containing high fructose corn syrup - if they are made with sugar, they could avoid such a tax.

* Consumer choice - aligning themselves with consumers who are demanding products to be in a more natural state will increase market share.

* Sourcing - By switching over now, they can lock up sugar contracts at prices that make sense, and ensure their competitors don’t have access to the supplies they would need in order to compete with Pepsi.

Sugar is also seen as more sustainable than corn, which is a mono-culture crop. Switching to sugar in then a proactive business choice versus a reactive business response, which is the position they’ll be putting Coke into if this test is successful.

Pepsi is on the Dow Jones Sustainability Index as being one of the top companies on the Dow Jones committed to sustainable business practices. Changing ingredients from high fructose corn syrup to sugar would be seen as a huge step towards sustainability. Sugar, be it from beets or cane, is going to come out the better choice in the case for environmental stewardship. From a cost perspective, it will likely be beet-sugar that gets used, which will be a boon to the beet-sugar producers out there.

So, is this really just a case of nostalgia for better days gone by? Or is this really very shrewd marketing and long range planning in the works? In this economy and recession, those of us of a certain age who can recall hot, lazy summers riding our bikes, personal childhood freedoms pre-Jaycee Dugard being abducted, and seeing Star Wars at the drive-in theater 14 times, will also recall with fondness, the Pepsi Wave logo and what was inside the bottle before the chemical cocktail we have today. If there was ever a time to recapture those consumers, it’s going to be right now. Maneuvering the generation behind me who grew up with blue cans instead of glass bottles might be a bit harder, but if Pepsi can swing it, this just might give them enough edge to win the cola wars once and for all.

Although I am a sucker for the Red Can - chemicals and all - with a move like this, I’m putting my money on Pepsi!