There’s a fascinating article in the current issue of New Yorker magazine (May 16). It’s written by John Seabrook and the title of the piece is ‘Snacks for a Fat Planet’. (I’d include a link here, but the New Yorker doesn’t allow public sharing of online content.)
One of the topics that Seabrook explores is the well-known Pepsi Refresh program, which was launched in 2010 as a ‘good works’ campaign for the brand. Pepsi promised to give away $20 million to causes picked by fans on social media. The theme was ‘refreshing ideas that change the world’.
During the first year, the Refresh campaign garnered more than 80 million votes on Facebook. It also created 3.5 million ‘likes’ on Pepsi’s Facebook page, and brought in over 60,000 new Twitter followers. Now here’s the daunting part: In 2010, PepsiCo lost 2.6% of the overall carbonated drink market. (Blue can Pepsi sales fell by 4.8% compared to the previous year.) So if you were the CEO of Pepsi – a position held by Indra Nooyi since 2006 – would you scrap the Refresh campaign? I wouldn’t, and here’s why:
1. People are finally looking for more healthy alternatives to sugary-sweet carbonated soda, and sales are down across the board. PepsiCo is attempting to gradually shift into products that are better for you, which is a good thing.
2. PepsiCo has annual revenues of almost $60 billion dollars. When you think about devoting $20 million to good causes against that kind of revenue, it’s not what you would call expensive.
3. The New Yorker piece fails to mention the other $1.5 billion or so (conservatively) that Pepsi spends on consumer advertising. Why does the New Yorker assume the decline of the brand hinges solely on this one program?
4. Having all those new followers on Facebook and Twitter allows the brand to communicate with a much broader evangelist base. They may not be buying more cans of Pepsi, but my guess is they will enthusiastically support new, healthier product ventures.
5. It pays to think long term. There is an undeniable trend toward healthier foods around the world. By focusing a tiny portion of profits on doing good, Pepsi is taking a position that ‘we are a good company’, and in the long run that can only help.
6. Focusing strictly on immediate sales is a dangerous path in social media. It makes much more sense to look at it from this perspective: Would you rather have people saying good things about your brand, or just bad? PepsiCo makes a lot of products (Fritos, Cap’n Crunch, Mountain Dew, Cheetos, Ruffles, Tostitos) that people love to say less-than-wonderful things about.
7. What if your company makes products – or provides a service – that’s not as potentially harmful as fattening soft drinks and chips? Perhaps they’re even good for you. Wouldn’t that mean that a strong social good campaign might have a more positive impact on sales? Suppose you’re in a highly competitive category, and you need to provide people with one more good incentive to choose your brand?
8. Those who are most active on social media LOVE brands that support good works. They say it’s among the most important things a company can do. If you have any doubt about this, just ask them.
9. The program funded dozens of projects ranging from homeless shelters, to school playgrounds to education programs for unwed mothers. In the greater scheme of things, is this really a bad idea?