Follow and star ↑↑「New Distribution」 See how many friends are following industry trends with you Does cashback on cola really work? Would you drink more cola because of it?

Pepsi's Cashback Rescue Lovers of fizzy drinks recently received good news: PepsiCo has launched its own membership program, rewarding loyal customers in a straightforward way: cashback. To get cashback, you need to register as a member of Pepsi's "PepCoin" program. After purchasing 20-ounce (about 600 ml) Pepsi beverages and Frito-Lay snacks marked with "PepCoin," you scan the barcodes on bottle caps and chip bags to earn up to 10% cashback. Once your total reaches $2, you can withdraw it to Venmo or PayPal. Note that both drinks and snacks are required. If you submit only one barcode (either cola or chips), you get $0.05 cashback only the first time. To continue earning cashback, you need to submit barcodes from both product types—not necessarily at the same time, but the second barcode must be submitted within 48 hours. According to PepCoin, each drink+snack combo earns about 37 cents, meaning you need to buy about six combos to withdraw once. To encourage more consumption, Pepsi added a restriction: if a user does not submit at least one drink and one snack barcode within 120 days, a $0.25 "account maintenance fee" will be deducted. Of course, it's not fair to say Pepsi is shamelessly encouraging consumption of cola and chips; at least the program limits submissions to 3 barcodes per day, and eligible products include not only carbonated drinks like cola but also Pepsi's premium water brand Aquafina and Lipton tea. Snacks include Lay's, Doritos, Fritos, etc. The company claims 70 beverages and snacks are involved, offering over 1,000 combinations to meet consumer needs. But honestly, 3 drinks and 3 snack packs a day is a lot of calories. Now, facing declining sales, Pepsi has directly launched a cashback plan for drinking cola. But is this self-rescue tactic really effective? Behind this plan is the undeniable downward trend of carbonated soft drinks. In the U.S., the overall decline in carbonated beverages began in 1998, and since 2005, it has been declining for 12 consecutive years. For the Chinese market, the decline started in 2000. Data shows that in 2000, carbonated drinks held a 36% market share in China, dropping to 30.96% by 2006, 22.34% by 2010, around 20% by 2012, and 13.7% by 2015. In 2013, carbonated drinks fell from the largest beverage category to second, overtaken by bottled water. According to a report by Beverage Marketing Corporation (BMC), U.S. carbonated beverage sales grew 2.4% in 2018, but only because companies continued to switch to smaller packaging and introduce more sugar-free varieties; overall volume still declined. It can be said that as a traditional food and beverage giant, Pepsi is trying every possible way to boost sales. Now cashback has become its new gimmick. But can this "pay you to drink cola" approach really save Pepsi's sales?

How Should We View Pepsi's Problem? Pepsi may hope to win back consumers through cashback, so it doesn't treat this as a short-term promotion. They told Engadget that "PepCoin" is a long-term program, so those looking to exploit it don't need to rush to spend. But perhaps next time you shop at the supermarket, you'll subconsciously choose Pepsi products because of the cashback. Using membership programs to drive repeat purchases is common in the food industry, but it's more often seen in chain restaurants. For example, Chipotle and Chick-fil-A launched their membership programs earlier this year and in August last year, respectively. Starbucks' loyalty program has long been a benchmark. But Pepsi may be the first FMCG brand to do membership. Compared to most programs that use points for rewards—where consumers might save for a year to get a shopping bag—Pepsi's cashback is simpler and more sincere, offering some appeal to consumers without brand loyalty. At least from social media feedback, many are interested, and some netizens are urging Coca-Cola to follow suit or they'll switch to Pepsi. Honestly, from a global perspective, the popularity of sugary soda like cola is, in a sense, a product of cultural economics. For a long time after its invention, cola was mainly popular in the U.S. Cola's rise began during the two World Wars, when U.S. foreign aid and military campaigns spread cola worldwide. At that time, people weren't particularly keen on it. But with the global spread of American pop culture—especially punk culture—eating fried chicken and drinking cola became a trend. Thus, cola became popular worldwide. The U.S. military drove cola's globalization, and American pop culture drove its universal adoption. However, since the 1990s, the fitness craze has become a global trend. This marked a major shift in consumption lifestyles away from high-sugar carbonated drinks. More and more people began to focus on health, and organizations like the World Health Organization started recommending "sugar reduction." Driven by this fitness trend, Coca-Cola, PepsiCo, and Dr Pepper Snapple—three giants that had been fiercely competitive—rarely joined hands and issued a joint statement: they pledged to cut total sugar in their U.S. products by 25% by 2025. Traditional high-sugar cola products inevitably face decline. So what is the way out for Pepsi? Is the cashback plan really useful? Price cuts can indeed work wonders in some ways. Pepsi's first price war was in 1939, but not through an overt price cut. If Coca-Cola was 5 cents per bottle, Pepsi at 2.5 cents would seem like half the quality. Instead, Pepsi also sold at 5 cents per bottle, but with a 12-ounce bottle. Thus, Pepsi's slogan was "5 cents buys twice as much." Undoubtedly, this was aimed at Coca-Cola. This not only elevated its image but also highlighted its value. The ad immediately attracted a large blue-collar following—after all, similar taste, more quantity, who wouldn't love it? After the ad aired, Coca-Cola could only watch Pepsi eat into its market share, unable to respond quickly because it still had large inventories of its standard bottles. After World War II, Pepsi had turned the market share ratio to 1:5, a huge victory. But this time may be different. The biggest characteristic of cola over the years is that its price has barely increased. From a beverage perspective, cola may be the product with the smallest price increase. Consumers have a low-price expectation for cola. So would a 10% discount below that low price work? It might work for the extremely poor or extremely price-sensitive, but since the challenge is the health upgrade driven by the fitness trend, price cuts or cashback may not have much effect. So, do Pepsi and others have better options? Yes, and there are several directions.

First, fitness drinks and health drinks are good ideas. Actually, it's not that people have stopped drinking beverages; they've shifted from sugary drinks to healthier ones. If Pepsi can launch more fitness and health drinks, it could lead consumers away from high-sugar drinks. Pepsi itself admits that 8.5% of its revenue comes from new products launched in the past three years. Pepsi's CEO has also said that carbonated drinks account for less than a quarter of Pepsi's global sales, while health products, including bottled water and sugar-free drinks, already account for a quarter. Given this, it might be wise to comprehensively enhance health drink offerings, build Pepsi's own health drink family, and thus improve competitiveness in the beverage market.

Second, build a diversified beverage and snack product system. While consumers care more about health, global consumption upgrades have driven a demand for diversity. A core reason for Pepsi's poor sales is that its products have aged to some extent, and consumers increasingly seek variety and personalization. So Pepsi could build a closed loop based on its existing food and beverage portfolio, encompassing various needs, to form its own system and meet the personalized needs of different consumer groups.

Third, further promote marketing as king. In a sense, the cashback activity is a marketing activity, and Pepsi has always been a marketing expert. For example, its retro marketing in 2018 achieved good results. If Pepsi can extend this marketing approach, it might achieve even better results. For instance, Beijing's Arctic Ocean soda, which has risen strongly in recent years, is a representative of old soda brands. According to Qixinbao data, this old soda company not only revived but also performed well, precisely because of good marketing. The nostalgia card became the key to its success. Pepsi could do more in this regard. In fact, since the trend is already set, Pepsi should face the challenge head-on. But as such a large group, transformation is not easy and requires more diversified and comprehensive top-level design.

Source articles: "PepsiCo also has a membership program: drink cola and eat fries to get money" by Wu Ling, ifanr "Pepsi launches loyalty program with cashback: can paying people to drink cola really save Pepsi?" by Jiang Han's perspective If your tip is adopted, we will pay 400-2000 yuan.