PepsiCo Tweaks Soda Prices

The company wants to change to a “hybrid everyday value” instead of sale pricing.

May 24, 2013

PURCHASE, N.Y. – The sale is over. PepsiCo Inc., which said recently that is tired of customers mostly buying its products on sale, is changing its pricing structure, Reuters reports.

The soft drink company is testing “hybrid everyday value,” that will close the distance between holiday sale prices and every other day. The new system will keep the discounts on holidays — which typically offer a dozen 12-ounce cans for $2.50 to $3 — closer to regular pricing of $5.99.

The pilot program started in several markets at some retailers, with a broader rollout scheduled for this summer, according to Al Carey, CEO of PepsiCo Americas Beverages. “This is a very important idea,” he said. “We are way too dependent on deep discounting 12- and 24-packs of our drinks during the holidays.”

Across the soft drink industry, 50% of its yearly volume is sold in around 12 weeks, with the rest sold during the other 40 weeks, said Carey. “We have trained the consumer to wait until the price goes down and then go fill up your garage and then don't buy it again for a very long time until the price goes down,” he said.

That practice has been difficult for both beverage manufacturers and retailers, who rely on soda sales to increase foot traffic. “ If you can get the discipline to execute this, I think it improves the profitability of the total business for us and also for our customers,” said Carey.

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