Pepsi turns blue in latest cola war salvo

LONDON - Pepsi is to take on Coca-Cola's Vanilla Coke with the launch of a new variety of its cola, Pepsi Blue, described as a fusion of berry and cola.

The new drink will hit stores in the US in August. It will be targeted at teenagers, two-thirds of whom, according to Pepsi's market research, said they would buy Pepsi Blue regularly.

Pepsi said that pre-launch marketing activity would be of the grassroots variety, similar to that for the launch of its Mountain Dew extension Code Red. Sampling activity will take place at youth-orientated venues backed by an internet campaign, posters and ambient media.

The company said there had been no decision on whether to use Britney Spears, Pepsi's US spokeswoman, to promote Pepsi Blue.

The brand has tried other colour variations in the past -- namely Pepsi Clear -- with less than successful results. However, its Pepsi Twist drink, which is cola with an added lemon flavouring, has been a success. In the UK, Coca-Cola recently launched a lemon variety of Diet Coke.

The company claimed that Pepsi Blue has the potential to reinvigorate the cola category, which has seen sales flagging across the board. It was one of 100 new "cola fusion" drinks Pepsi tested on its target market of teenagers.

Dave Burwick, senior vice-president of marketing for carbonated soft drink brands at Pepsi Cola North America, said: "We talked to thousands of teens about creating a cola fusion and they told us two things: 'Make it berry and make it blue'. Teens understand fusion better than any other age group. They live it every day -- in their music, fashion and culture."

"We're convinced innovation is the key to growth. In the past 15 months alone, with exciting new products like Mountain Dew Code Red, Pepsi Twist and Sierra Mist, we've proved consumers -- particularly teens and young adults -- will respond enthusiastically to new carbonated soft drinks," Gary Rodkin, president and CEO of Pepsi-Cola North America, said.

Shares in Pepsi-Cola closed down by 0.33%, or 17 cents, at $51.83 yesterday.

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