Dive Brief:

• Pepsi unveiled a new holiday marketing effort that sees Santa Claus make the switch from rival Coke Zero Sugar, according to news shared with Marketing Dive.
• A video kicking off the social-focused campaign shows Santa caught red-handed buying boxes of Pepsi Zero Sugar from a New York City bodega. In a follow-up post, the Christmas icon addresses his change in preferences while fumbling with smartphone technology and teeing up a nationwide SMS promotion. 
• Consumers can text “taste” to the number 81234 to receive up to $2.50 cash back on purchases of Pepsi Zero Sugar through the end of the year. Pepsi also dropped in on SantaCon in New York last weekend to conduct some “unscientific polling” around bar-hopping Santas’ soft drink of choice. 

Dive Insight:

Pepsi is toying with its chief rival’s holiday marketing iconography to boost its zero-sugar offerings around the end of the year. Coke has leveraged Santa in its advertising for almost a century, to the extent that it has helped shape broad consumer perceptions of the Christmas fixture. However, Saint Nick proves a fickle soda fan in Pepsi’s latest social push, which sees him leave a bodega with a gift bag full of Pepsi Zero Sugar and later address the controversy in a livestream-style video that he clumsily struggles to record. 

Pepsi took the concept into the real world last weekend for New York City’s SantaCon, an annual occasion that sees crowds of rowdy people go bar-hopping outfitted as Father Christmas. Taste tests conducted during the typically chaotic gathering saw eight in 10 Santas prefer Pepsi Zero Sugar, though the brand admitted that the findings were unscientific.

Other elements of the effort include a national SMS promotion encouraging consumers to make the switch to Pepsi with the promise of cash-back rewards through the end of the year. Pepsi is running additional Santa-related content on its Instagram, Facebook, X, TikTok and YouTube channels. VaynerMedia is behind the creative. 

The PepsiCo marketer has gone on the offensive in recent months, with a focus on candid-camera content intended to connect with social media audiences and go viral. One stunt saw Pepsi agents storm fast food chains that only carry Coke products to swap out diners’ beverages with Pepsi, with some expletive-filled reactions caught on film. Pepsi’s renewed cracks at competitors come as the brand has seen some market share slip. It lost its long-held spot as the No. 2 soda in the U.S. earlier this year to Dr Pepper. 

Coke is also in a vulnerable position after releasing a holiday campaign that was created with generative artificial intelligence (AI). The work, which references nostalgic ads from the company’s past, has been highly controversial in the creative community and appeared to receive a mixed consumer response. 

Zevia, a soda brand that uses the sugar substitute stevia, earlier this month released a campaign that features deliberately off-putting AI-generated Christmas imagery in a shot across Coke’s bow. Pepsi and Coke both are contending with a rising fleet of better-for-you soft drink disruptors and leaning on the zero-sugar category as a growth driver in response.