Why Pepsi Canned The Refresh Project
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 They’ve been replaced by “Live for Now” marketing-speak, “Now is alive, fun and fearless.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:
- With so many nonprofits participating in
the voting program, it was nearly impossible to vet all organizations thoroughly, resulting in persistent allegations of fraud.
- The pressure on nonprofits to tap
supporters for votes became a significant resource drain, causing some organizations to withdraw.
- 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.
- Supporting multiple organizations across multiple issues/geographies
led to scattered results, versus a concentrated impact on a specific issue.
- 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.