Dive Brief:

• Pepsi today launches Pep's Place, a virtual restaurant that lets consumers pick their favorite beverage to see suggested food pairings available for ordering and delivery, the company said in a press release. To promote its new offering, the PepsiCo-owned brand is also kicking off the "Better with Pepsi" campaign that includes eight commercials.
• The virtual restaurant can be found at PepsPlaceRestaurant.com and on food-delivery apps such as DoorDash and GrubHub for the next 30 days. The "beverage-first" experience asks consumers to pick their favorite beverage from a menu to see food recommendations. The list of available beverages includes Pepsi, Diet Pepsi, Pepsi Zero Sugar, Pepsi Real Sugar, Pepsi Wild Cherry, Pepsi Zero Sugar Wild Cherry, Pepsi Mango and Pepsi Zero Sugar Mango.
• Pepsi is leveraging the popularity of virtual restaurants and ghost kitchens to provide a unique customer experience. The campaign includes Spanish-language commercials that celebrate food's role in bringing people together.

Dive Insight:

This is the first time that Pepsi has offered cola and food delivery, per information shared with Marketing Dive. The move reflects the popularity of virtual restaurants that utilize ghost kitchens and exist only to serve online customers. The trend has accelerated under the pandemic with ghost kitchens expected to be a $1 trillion market worldwide, according to Euromonitor data cited by Pepsi.

Pep's Place promises a "beverage-first" experience, reversing the idea of ordering food first and making drinks an after-thought. This approach enables the brand to showcase the full lineup of Pepsi products, including its recently launched mango-flavored colas. Pepsi is putting a lot of marketing muscle into the "Better with Pepsi" campaign with national TV spots that offer a tribute to people's favorite foods. The food menu includes entrees like burgers and ribs as well as sides such as Lay's chips, mac and cheese and broccoli.

Uber Eats, the ride-hailing giant's food-delivery service, was one of the first companies to advise local restaurants on how they could increase sales by using their kitchen equipment to make other kinds of foods in underserved areas. That meant a pizza place with a deep-fat fryer, for example, could set up an online presence as a fried chicken restaurant in a neighborhood didn't offer a nearby option.

Pep's Place is another sign of PepsiCo's willingness to experiment with virtual experiences and product integrations to keep pace with the latest digital trends. Pepsi also has integrated its brand with exclusive content to help reach younger consumers who tune out commercials. To support the launch of Pepsi Mango, the brand this year worked with ViacomCBS to produce a dating show called "Match Me If You Can" whose underlying theme was that Pepsi with mango flavor made a "perfect match." The show followed the release of "Cherries Wild," a half-hour trivia game show produced in a partnership with Fox Entertainment, that prominently featured Pepsi Wild Cherry branding. In addition to that show, Pepsi sponsored a virtual hip-hop competition called "Your Wildest Dreams" on video app Triller that featured its cherry-flavored cola.

With Pep's Place, Pepsi appears to be making a bet that interest in digital ordering for food delivery will remain strong even as vaccination rates rise and pandemic restrictions around in-person dining begin to ease. Restaurant chains including Chili's parent Brinker International, Applebee's and Bloomin' Brands have moved into the virtual restaurant space to capture this consumer attention, utilizing both third-party services — which present their own marketing challenges — as well as building out their own first-party ordering and delivery systems. While Applebee's Cosmic Wings brand offers Cheetos-inspired items, Pep's Place is an early adopter of virtual brands by a CPG brand.