Cheetos' Win What You See expands locally and internationally

Dive Brief:

Cheetos' first-ever promotion supported by TV ads was launched in July and has garnered more than 80,000 submissions from consumers eager to win a real-life version of the unique shapes they see in their Cheetos snacks, PepsiCo's CEO Indra Nooyi said during an earnings call this week. The program is now being localized and rolled out internationally to seven countries so far, with more on the way.
PepsiCo’s spending on advertising and marketing was up 6%, company officials said during its Q3 2018 earnings report. The increase in spend negatively impacted the company’s P&L, with officials saying the company may “step back” how it approaches marketing spend. The goal is to stay competitive and consistent, but not exceed the competition in spend.
The company also reported that R&D spending had increased 22% for the quarter, and e-commerce spending was about double for Q3. Overall, PepsiCo’s Q3 earnings exceeded analysts’ expectations, according to CNBC. The company said it expects a 3% revenue growth for the year. PepsiCo’s North American beverage business saw organic growth of 2.5%, up from 1.5% last quarter.

Dive Insight:

The expansion of the Cheetos Museum Win What You See contest points to the ongoing success of an effort that was initially launched two years ago encouraging fans to submit interesting Cheetos shapes, with more than 200,000 shape submissions having been received so far. By adding a contest element to the effort and advertising it on TV, the brand appears to be resonating with a campaign that encourages interactivity.

PepsiCo increased its marketing spend earlier this year to help turnaround soft sales and keep up with its main competitor Coca-Cola. The strategy seems to have paid off, as the company saw an increase in its beverage business in the most recent quarter. While Pepsi had put most of the spend behind beverage brands Gatorade, Pepsi and Mountain Dew in an effort to compete with Coke, the company now says it is focusing on “sustainable” growth and “winning” on innovation and execution.

PepsiCo CFO Hugh Johnston said that the company wasn’t planning to invest in cannabis, news that caused the company’s stock to drop 1.4%, according to Bloomberg. The ingredient has received attention recently from some big brands, so PepsiCo's decision to stay away for now was a surprise. Coke recently said that it was looking into using CBD, a non-psychoactive element of cannabis, in its wellness drinks. Alcohol companies Coors and Constellation Brands have invested in cannabis.

E-commerce continues to be a focus area for PepsiCo, as the company reported spending on the technology more than doubled for the quarter, a move that is likely to help the company strengthen direct relationships with consumers and thereby boost its marketing and product development efforts through a deeper understanding of its customers. PepsiCo announced earlier this year that it would invest some of the millions of dollars it planned to save under the GOP tax plan into e-commerce and digital, reporting that e-commerce was a $1 billion business.