Food & Beverage

PepsiCo has been training for the Super Bowl for six months

Key Points
  • Super Bowl Sunday is the second-largest food consumption day in the U.S., surpassed only by Thanksgiving.
  • Diners are more willing to experiment during the Super Bowl than on Thanksgiving, giving marketers a clean slate.
  • More than 60,000 frontline associates assemble about 64,000 in-store Pepsi displays ahead of the big game.
Behind Pepsi's Super Bowl ads

This year's Super Bowl pits the New England Patriots against the Philadelphia Eagles and PepsiCo against your wallet.

Party hosts and guests are expected to spend roughly $15.3 billion on their Super Bowl celebrations this year, according to the National Retail Federation. It is the second-largest food consumption day in the U.S., surpassed only by Thanksgiving.

The Super Bowl and the weeks leading up to it are the third-largest event for Pepsi's Frito-Lay snacks division, which houses the Tostitos, Doritos and Lay's brands. It is the fifth-largest for Pepsi's beverage division and third-largest for its carbonated soft drinks specifically.

The big game's lineup this year may give an extra boost to sales. An underdog like the Philadelphia Eagles taking center stage could lead to more excitement and in turn more sales.

"If the same team is winning all the time, people are excited, but not as excited as if there is an underdog," said Seth Malley, vice president and divisional merchandise manager of beverages at Walmart.

"Both teams this year have strong fan bases across the country," said Malley.

Here is a look at Pepsi's preparation for the big game.

The preseason 

Planning starts nearly as soon as last year's Super Bowl has ended, but true preparations begin to ramp up in August.

"We get very focused about six months out," said Steven Williams, senior vice president and chief commercial officer of Frito-Lay North America.

The company maps out all of its major events, including the major summer holidays. It works closely with its marketing team to ascertain which products it wants to promote. Unlike Thanksgiving diners loyal to their sweet potato pie or grandmother's stuffing recipe, Super Bowl fans are more willing to experiment with their menu.

That means for Pepsi every year is a new chance to throw marketing dollars to support one or two "hero products," the ones it promotes the most and dedicates airtime to in ads during the game.

Pepsi products on display for the Super Bowl.
Source: Pepsi

The decision of what to ordain a hero becomes a delicate balance for Pepsi as it looks to transform its food offerings to suit the next generation, while also protecting its core sales. Chief Executive Indra Nooyi told investors in October the company had sacrificed too much of the latter in favor of the former as she explained disappointing beverage sales in North America.

Last year, Pepsi's hero product for the Super Bowl was its newly launched premium water brand Lifewtr. Neither its flagship Pepsi cola nor Doritos chips had in-game commercials (though Pepsi Zero Sugar did sponsor the halftime show and have an ad before the trophy presentation).

This year, Pepsi is returning to its roots. It is putting its marketing dollars behind two products that are brand extensions of its core: Mtn Dew Ice, a 100 calorie per 12 ounce lemon-lime soda with caffeine, and Doritos Blaze, a spicy new addition to the Doritos brand.

"You want to strike the right balance. It's an incredibly great time to launch a new product. You want to reinforce the core and target new things. This year shows the strength of our core brands," said Derek Lewis, senior vice president and general manager of Pepsi North America field operations.

Pepsi says it remains committed to Lifewtr, with plans to put further marketing emphasis behind the drink.

One perennial hero for Pepsi, though, is its Tostitos tortilla chips.

"It's a dipping holiday," said Williams, referring to the numerous dips and nachos football fans chomp on while watching the game.

Charging the field

As the months and weeks inch closer to the big game, Pepsi unleashes the power of its "direct store distribution model," through which its own sales representatives go into and staff the stores with goods. It amps up production to keep pace with playoffs and the tailgate parties that accompany the games.

Pepsi's team services roughly 21,000 sales routes in the weeks leading up to game day. More than 60,000 associates are tasked with assembling about 64,000 displays. The benefit of this model, says Pepsi, is it affords flexibility when it comes to last-minute changes based on how customers are reacting to products and even how the football season goes.

Front-of-store displays will celebrate this year's theme for Pepsi, "Made for Super Bowl." The displays will take advantage of the company's complementary food and beverage portfolio, plugging its lead brands, such as Tostitos and Pepsi. They have giant cardboard cutouts promoting the game. Around the store's perimeter, Pepsi will promote other brands in its portfolio, like its Smartfood popcorn.

A Super Bowl chip display by Pepsi.
Source: Pepsi

Traffic in the stores will begin to pick up on Friday and will carry into Sunday morning before the big game. The weekend is one of the biggest of the year for Walmart, outside of Thanksgiving. To prepare, Walmart will put up in its store end-caps to carry additional inventory. Associates will be outfitted in their favorite team's jerseys.

"More and more people are waiting 'til the last minute to buy things," said Julie Barber, vice president and divisional merchandise manager of snacks at Walmart.

"We're going to make a big deep play end of this week."

Work continues during the game. Pepsi has a 30-second ad, "This is Pepsi," leading into the halftime show. It's a nostalgic look back at Pepsi's history, featuring clips of Cindy Crawford, Britney Spears and Michael Jackson. The ad will feature Pepsi, Diet Pepsi and Pepsi Zero Sugar.

There also will be back-to-back 30-second spots promoting Mtn Dew Ice and Doritos Blaze, featuring actors Morgan Freeman and Peter Dinklage. The minute-long promotion will run in the first half of Sunday's game.

The value of that exposure is worth about $32 million, according to Apex Marketing Group. If the winning coach is dunked in Pepsi-owned Gatorade, that's an extra $2.2 million of branding, according to Apex.

(Disclosure: NBC Sports is televising Sunday's Super Bowl. Both CNBC and NBC sports are units of NBCUniversal.)