Pepsi Gets Healthy (Without Mentioning Pepsi)

As more and more consumers turn away from soda, major brands in the industry are faced with challenge of offering healthier products in an attempt to offset their lagging sales. PepsiCo is taking a two-fold approach, introducing both new individual products and an entire line of vending machines targeting the health-conscious.


When consumers think “healthy beverage options,” probably the last thing that comes to mind is “major soda brand.”

But PepsiCo — the second-biggest such brand in the U.S. — is hoping to change that.

With carbonated soft drink sales experiencing a ten-year decline as a result of an increasing amount of consumers seeking healthier beverage alternatives, such as juices and flavored waters — and not necessarily diet sodas, which, while lacking sugar, nonetheless contain artificial sweeteners like aspartame that give folks concern — the company behind Pepsi (as well as the soda brands Mountain Dew and Sierra Mist) is making a pivot of sorts.

Beyond last year’s switch from aspartame to sucralose (AKA Splenda) in its Diet Pepsi products (a move that hasn’t exactly wowed people’s taste buds), PepsiCo is responding to consumers’ desire for healthier noncarbonated beverage options by launching, this year, a new line of Organic Gatorade and promoting its Tropicana brand as being GMO-free (which is arguably a redundant claim, as Nasdaq points out that genetically modified oranges have never been available).

Those offerings — along with PepsiCo’s Naked Juice drinks and some of its Frito-Lay snack products, such as Lay’s Oven Baked potato chips and Sabra ready-to-eat hummus kits, among others — will be available in a new line of vending machines that the company is rolling out this year called Hello Goodness.

Branded as offering “good- and better-for-you product choices,” that’s a consciously relative description, of course, as the Hello Goodness machines will also sell Doritos — albeit in a reduced fat version — and Mountain Dew energy drinks (which, along with some of the other items in the machines, are gluten- and fat-free; just because something’s a technicality doesn’t make it any less true.)

“Our goal is to give consumers more choice when it comes to what they eat and drink, and we’re providing the choices they want,” Pepsi spokesperson Gina Anderson told CNNMoney. “Given our vast food and beverage portfolio, we’re able to include a wide variety of options and products in this machine that cover categories such as lower-calorie, lower-sodium, multigrain and 100 percent juice.”

As the outlet reports, the Hello Goodness machines — whose thousands of locations will include health care, governmental and educational facilities (the latter group meaning universities and not, as Bloomberg points out, grade schools) — will feature touchscreen displays that provide nutritional information on the product offerings and can recommend food and beverage pairings based on the time of day. (Neither the CNNMoney nor Bloomberg story say whether or not the Hello Goodness machines would outright refuse a person attempting to purchase Nacho Cheese Doritos for breakfast, though it’s probably unlikely.) The machines’ digital interface will also allow for consumers to makes purchases using credit cards or Apple Pay.

“This is the vending machine of the future,” Kirk Tanner, PepsiCo’s chief operating officer of beverages in North America, told Bloomberg. “There’s an opportunity for us to be a leader in better-for-you vending, and we have a long-term commitment to making that happen.”

Several outlets (including Bloomberg) credit PepsiCo’s new direction — both the healthier product offerings and its inclusion in the Hello Goodness vending machines — to CEO Indra Nooyi’s strategy to meet food and beverage consumers’ evolving preferences, which are moving away from what were once soda conglomerates’ bread-and-butter (or, perhaps more specifically, candy-and-sugar) offerings.

One key indicator of just how serious PepsiCo is in its efforts to disassociate its 51-year-old brand (or 113-year-old brand, if you count its origins as the Pepsi-Cola Company) from negative health effects, like obesity, diabetes and heart disease, is that absent from all of its new products is the very word “Pepsi.”

The company’s namesake soda will, of course, continue to be sold in its many forms (Pepsi, Caffeine-Free Pepsi — née Pepsi Free — Pepsi Wild Cherry and its aforementioned aspartame-swapped-out diet variations; heck, even Crystal Pepsi made a contest-affiliated temporary return last month — cue the Van Halen), but the very fact that a major retail brand would effectively remove its own name from products in an attempt to make them more appealing to a desired audience speaks volumes, not only about the severity of the challenges facing the soda industry but those facing any established brand that seeks to evolve with changing consumer behaviors.

Pepsi (and top U.S. soda brand Coca-Cola, which is also making a push to appeal to health-conscious customers with sparkling Minute Maid and Smart Water) might not be in as dire a position regarding optics as are, for example, tobacco companies, but if its efforts to improve popular opinion — and, therefore, its sales — of its brand with its healthier alternatives don’t pan out, who knows what the next move might be.