Why Pepsi Canned The Refresh Project

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After years of attention, interest and fanfare, earlier this year Pepsi let its much-vaunted social impact initiative, the Pepsi Refresh Project, quietly fizzle away. Today, if you try to find the project’s website, www.refresheverything.com, you’ll be redirected to the Pepsi brand site, where you’ll encounter the amped-up marketing blitz, “Live for Now,” a heavily entertainment-focused campaign that puts Pepsi back on familiar ground: the glitz and glam of pop culture. 

For marketing geeks, this is a big deal. A powerhouse brand that broke new ground in cause marketing—boldly stepping away from Super Bowl ad spending and redirecting millions to fund positive change—has reverted entirely to full-bore, all-about-me marketing. Gone are the Pepsi Refresh Project’s soul-searching questions like, “What do You Care About?” and exhortations to “Do Some Good.” They’ve been replaced by “Live for Now” marketing-speak, “Now is alive, fun and fearless. Now is refreshing. Now is epic…,” and important questions like, “Will there be another Ghostbusters movie?” The campaign launched in April with a catchy spot featuring Nicki Minaj. This summer brought a partnership with pop star Katy Perry to support the launch of her bubbly biopic “Part of Me.” Where has all the do-gooding gone?

A key factor in this shift? Business realities. While the Pepsi Refresh Project was running, Pepsi had consistently been losing market share and volume, leading to a humiliating drop to lowly third place behind Coke and Diet Coke. Add to that widespread investor pressure on CEO Indra Nooyi to focus on driving core businesses, and the handwriting was on the wall. The Pepsi Refresh Project was simply not helping sell more fizzy stuff. Given this lackluster performance, Pepsi, without much fanfare, shut it down. 

From a strategic perspective, the program’s end is no surprise. Unfocused models like the Pepsi Refresh Project are generally ineffective in engaging stakeholders, optimizing business and social impact, and building equity. Although innovative (crowd-sourced voting) and relevant (tapping into increasing consumer appetite for cause), the Pepsi Refresh Project was flawed from the outset. Here’s why:

1. With so many nonprofits participating in the voting program, it was nearly impossible to vet all organizations thoroughly, resulting in persistent allegations of fraud.
   
   
2. The pressure on nonprofits to tap supporters for votes became a significant resource drain, causing some organizations to withdraw.
   
   
3. Not having a direct product tie-in decreased odds from the start that this would drive sales—a big no-no in a declining and fiercely competitive category.
    
4. Supporting multiple organizations across multiple issues/geographies led to scattered results, versus a concentrated impact on a specific issue.
   
   
5. Finally, when it comes to cause, if you don’t stand for something, you stand for nothing. Despite millions of dollars in grants (estimated at $25 million), it’s hard to articulate what the program was really about and where real results could be found, beyond broad generosity. 

Some will say Pepsi lost a bit of its soul when it ended the Pepsi Refresh Project—and there may be some truth to this. After all, what are we to think about a brand that promises to make the world better and then drops everything when the going gets tough? But this is not the whole story. From a brand-building perspective, Pepsi’s shift from the Pepsi Refresh Project was actually a smart, strategic move. Earlier this year, Advertising Age reported that after exhaustive global consumer research to distill the brand’s essence, Pepsi marketers reached a simple but powerful insight: “Coke is timeless; Pepsi is timely.” This epiphany is now driving Pepsi to refocus its marketing on pop culture, where the brand has very deep roots (think Michael Jackson, Britney Spears, the Pepsi Generation, etc.). From this position of strategic clarity, it’s hard to see the Pepsi Refresh Project as anything but a well-intentioned, innovative experiment that nonetheless siphoned a lot of money and focus from building the brand’s core equity. Nicki Minaj to the rescue.

It will be intriguing to see what Pepsi does with causes moving forward. With consumers increasingly demanding companies deliver positive societal impact, sitting it out is not an option. Pepsi will need to find an authentic, brand-relevant way to harness the power of social impact. One obvious suggestion: Build off of Pepsi’s enduring connection to pop culture by revolutionizing funding and advocacy for the arts and music. This could mean doing something bold like creating a Pepsi National Arts Innovation Challenge to develop breakthrough programming and help restore cuts caused by the recession.

Although the Pepsi Refresh Project may be gone, its influence is still very much felt. Inspired by Pepsi, a multitude of companies are now crowd-sourcing philanthropy and embracing broader consumer participation. But they are also taking things to the next level by establishing greater control and focus. This means taking a stand on specific issues and inviting stakeholders to vote among a narrowed set of options. Looking ahead, it’s likely that Pepsi Refresh Project’s impact will be a lasting one, given the outsized impact it had in accelerating the democratization of cause and challenging time-worn notions of top down, one-way corporate philanthropy. Now that’s refreshing.

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14 comments on "Why Pepsi Canned The Refresh Project ".

1. Doug Weinbrenner from Intouch Solutions
   

   commented on: October 29, 2012 at 10:57 a.m.
   Great post Craig! Thanks for going the extra step(s) to look at both sides [financial/missional] of the cause marketing coin and drawing the line through both sides instead of just picking one to place the blame on. This is a pretty indicative microcosm of the very big and very real complexities good 'Social ROI' demands - it aint easy. Be Well, Doug
2. Nick Cavarra from Social Punch Marketing
   

   commented on: October 29, 2012 at 7:31 p.m.
   Thanks for posting Craig. The new mantra must be focus, focus, focus. Would love to see Pepsi support the arts and education - and there are plenty of Pitt Bulls and LMFAOs that will highlight the teachers that have made a difference in their lives. For Pepsi to be timely, they can go from refresh to restore, and it couldn't happen at a more desparate time.
3. Donna Callejon from GlobalGiving
   

   commented on: October 30, 2012 at 9:21 a.m.
   As one of the original partners in Pepsi Refresh, I have read just about every article written about it since 2010. This is one of the best, if brief, post mortems written. What makes us @globalgiving sad, too, is that the many stories of impact and hope - which we have monitored and continue to monitor on behalf of Pepsi - have been buried in the drive to critique the program. A simple google search will uncover examples of programs funded all around the country. Yes, there were a handful of unsuccessful grants - but when you take risks you will have those "misses," and Pepsi was willing to do absorb that risk in order to try something truly groundbreaking. From kids getting better educational tools, to improved parks, to saved animals and voter registration efforts, Pepsi Refresh Project funded some fantastic programs that will have lasting impact on communities around the U.S. for years to come.
4. Nick Cavarra from Social Punch Marketing
   

   commented on: October 30, 2012 at 12:32 p.m.
   Donna: I agree that Pepsi had the courage to take big risks and should be congratulated for doing so. I certainly would not look at the program as a failure, rather a case study in what works well and what doesn't. Such is the challenge of the first mover advantage... it's not always an advantage...
5. David Hessekiel from Cause Marketing Forum, Inc.
   

   commented on: November 2, 2012 at 7:55 a.m.
   Bravo Craig on this insightful update on the Pepsi Refresh Project! Numerous successful corporate and brand social initiatives make it clear that inserting purpose into the marketing mix CAN add tremendously to reputation, consumer engagement, employee morale and many other aspects of a businesses health. The Pepsi Refresh Project reminds us that a cause platform alone is not sufficient to guarantee success no matter how big the budget or how innovative the campaign.
6. Mara Einstein from Compassion Inc (Author)
   

   commented on: November 2, 2012 at 8:35 a.m.
   Can't some of Pepsi Refresh's issues be attributed to lack of support after the initial launch? It was presented with huge fanfare and seemed to disappear fairly quickly--certainly from a consumer perspective. I understand not wanting to throw good money after bad, but it seems that a "refreshed" Refresh might have been worthwhile given all the good that was done. As you say, bravo to Pepsi in their leadership, the good work that was done and the inspiration it gave to other companies to refine new thinking.
7. Doug Dome from Dome Consulting
   

   commented on: November 2, 2012 at 10:45 a.m.
   Nicely done Craig. Unfortunately, the Pepsi Refresh Project put Indra Nooyi in the unique position of CEO poster-child for purpose-based strategy and marketing, where she publicly challenged other CEOs to follow her lead. Not surprisingly, most adopted a wait-and-see attitude. Sadly, Pepsi’s failure to more directly connect its investment in its cause commitment to its brands, among all the other reasons you reference, can now serve as a proof point for those CEOs who don’t view cause marketing as a viability strategy to build shareholder value.
8. Bill Mcclain from Clarisonic
   

   commented on: November 4, 2012 at 1:45 a.m.
   Won't it be ironic if "timeless" Coke takes the cause marketing baton from "timely" Pepsi and extends its market share lead with a focused, long term, mission-aligned cause marketing campaign.
9. Donna Callejon from GlobalGiving
   

   commented on: November 4, 2012 at 11:11 a.m.
   Great point, David. In fact, the original goal of PRP was not sales, but to align the company's biggest brand - and customers' interests - with its "Performance with Purpose" commitment. Of course Pepsi is not going to share all of its market research with the pubic (aka competitors) but the goals and results (some of which are covered in this HBR case study http://hbr.org/product/the-pepsi-refresh-project-a-thirst-for-change/an/512018-PDF-ENG) included employee engagement, reputation/brand image, etc.
10. Nick Davies from Neighbourly.com
    

    commented on: November 4, 2012 at 8:04 p.m.
    Thanks for the post Craig, this article's long overdue. A couple of observations from me. The problem with refresheverything was that it set expectations Pepsi couldn't hope to achieve. Millions of citizens working really hard to pull together 120,000 entries - and less than 400 winners? Community projects are deeply personal and yet 119,500+ (or 99.6%) of these entries were 'losers'. They'll be disengaged at best, disenfranchised at worst. I'm not sure CSR initiatives have to have direct product tie-in to work but I do think, as Nick C suggests, they have to have focus. That focus needs to deliver a balance between 'meaningful engagement' and 'social media engagement' - and refresheverything had it way out of kilter. Which is such a shame given the great intentions, fantastic project successes and real good done. I do hope Pepsi figure out a way to build a more focused programme with better campaign dynamics and give it another go.
11. Craig Bida from Cone Communications
    

    commented on: November 6, 2012 at 10:20 p.m.
    Thanks to everyone who commented. I am glad to see this piece struck a chord. Hopefully, other companies will learn from Pepsi's experience the power of focus and establishing a strong linkage to the brand.
12. Ryan Scott from Causecast
    

    commented on: November 7, 2012 at 12:54 p.m.
    By not having a feedback mechanism or vetting process the initiative came across as purely a marketing ploy. It's unfortunate because a lot of the people involved saw the potential but it was not fully realized. What happened with the money? Surely there's lots of stories that could have come from it, but there didn't appear to be a mechanism in place to bring those stories to the public. Additionally, I saw a lot of nonprofits spending a great deal of time promoting Pepsi when they could have been out building sustainable relationships with large donors or corporate giving programs. Money could have been well spent on a matching employee giving program that leverages social and traditional media so that the best potential Pepsi brand ambassadors - their 300,000 employees - could promote the good works they are (already, in many cases) achieving with the support of the company. That's not just a marketing campaign, its a sustainable employee and consumer engagement strategy.
13. shaun whatling from Redmandarin
    

    commented on: February 19, 2013 at 4:23 a.m.
    hi Craig, Great article. RE's programme design doomed it to failure from the outset. It's only a shame that the corporate learning is that 'it didn't work', rather than 'we went about this the wrong way'. Because whilst Pepsi can be congratulated for being bold and innovate, they also leave a monumentally big argument for the 'no' camp, when it comes to brand-led social engagement. And to admit that Coke is timeless and Pepsi is timely - that's huge. For me timely equals ephemeral and RE was certainly ephemeral, for the reasons you've outlined. We're currently involved with a major UK bank, trying to help them make a significant statement in the public space - and the constant kick back is: it has to be easy, it has to reach everyone, it has to be fun. And that's a bank, for heaven's sake. I can only imagine the internal conversations within Pepsi! Say hi to Ziba! bw Shaun from Redmandarin
14. Darrin Stephens from McMann & Tate
    

    commented on: February 19, 2013 at 10:25 a.m.
    It wasn't just Super Bowl ad spending that Pepsi stepped away from. It was TV in general and the dollars were redirected to the internet/social media. Mitsubishi Motors did something like that years earlier. What a raucously bad idea. Take note marketers. Cut TV ad spending at your peril.

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