Analysis - Kickstart shines for PepsiCo on damp Memorial Day
PepsiCo had a tough Memorial Day
PepsiCo's latest innovation Kickstart has gained early traction in the US despite the group's other brands taking a hit from bad weather over Memorial Day, an analyst has said.
The Mountain Dew extension, which launched in February, “appears to be off to a strong start”, Well Fargo's Bonnie Herzog said in a note today (30 May). The note is based on a Well's Fargo survey of convenience store retailers over Monday's holiday, traditionally the start of soft drinks' main selling season in the US.
Despite Kickstart's positive response in the survey, Herzog said she remains “sceptical” about the long-term pricing and placement strategy of the product.
Another innovation that enjoyed a strong Memorial Day, Dr Pepper Snapple Group's Ten portfolio, “could see stronger penetration over time as awareness builds”, the analyst said. Dr Pepper Ten, a low-calorie version of Dr Pepper, was launched in 2011, with other varients following last year.
PepsiCo was the “most negatively affected” by rain and cold weather on Memorial Day because of its high market share in cities where temperatures were lowest, Herzog said. The survey showed that convenience store soft drink sales received a 2% boost from the holiday compared to 6% last year.
Bad weather throughout Q2 saw survey respondents predict a 1.3% sales rise over the same quarter last year, the note said.
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