Dive Brief:

• PepsiCo will debut a new sparkling water drink with two TV ads and dedicated hashtag, #CrackASmile, during the Oscars awards ceremony on March 4, according to a press release by the company.
• The 30-second spot highlights the beverage's "fun personality," shown through its colorful packaging of smiles and witty messages like "love at first phssst" on the pull-tab and can. Bubly comes in eight flavors and will be available in stores across the U.S. this month, per the release.
• Last year, PepsiCo launched a premium bottled water brand Lifewtr. The new water products advance the company's Performance with Purpose initiative to have two-thirds of global beverage volume with 100 or fewer calories from added sugar by 2025.

Dive Insight:

Bubly's #CrackASmile hashtag and cute packaging that features quirky greetings and messaging could generate some social media buzz, especially with a pricey TV ad buy during the Oscars, which reels in more than 30 million viewers each year. PepsiCo's choice to leverage the Oscars's large viewership may miss the mark in connecting with younger audiences, which tend to be more skeptical of celebrities in general and more trusting of the lower-cost influencer approach that LaCroix has used successfully thus far.

With Bubly, PepsiCo aims to shake up the sparkling water category with playful campaign "while keeping it real" through a lack of sweeteners and artificial flavors, per the press release. The space has seen sales boosts over the past year or so, with many brands positioning their products as healthier alternatives to sodas and other sugary drinks. Soda giants Pepsi and Coca-Cola have seen consistent sales declines over the past several years, as more health-conscious millennials and Gen Zers shun soft drinks in favor of alternatives like tea, bottled water and sparkling water.

Competition is heating up in the sparkling water category. PepsiCo's entry into the space may come a little late, as brands like Perrier and La Croix have already made their mark with a variety of flavored products. La Croix has been a hit among millennials, in part by tapping into Instagram micro-influencers, to share hashtags, videos and brand experiences with followers online. The company reported that net sales jumped from $646 million in 2015 to $827 million in 2017, with profits more than doubling.

Frito-Lay, another PepsiCo division, recently announced a new campaign for its classic Lay's potato chip that also emphasizes smiles through smile-centric packaging and social media push via the hashtag #SmileWithLays. The effort reflects the brand's research showing that the vast majority of people feel happy when they see another person smile, and that 95% would smile more often if they knew it could brighten someone's day. As such, Smile with Lay's is an attempt to tie into the current zeitgeist and fit into PepsiCo's broader goals of maintaining its position as a top-of-mind brand that consumers are happy to engage with.