ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, December 16, 1996 TAG: 9612160157
SECTION: NATIONAL/INTERNATIONAL PAGE: A-2 EDITION: METRO
SOURCE: The New York Times
In an escalation of the soda wars, Coca-Cola Co. plans to challenge Mountain Dew, a 50-year-old icon of successful consumer marketing that has been a major moneymaker for Pepsico Inc., people with knowledge of Coca-Cola's plans said this weekend.
With a Super Bowl debut for a $50 million marketing campaign, these people said, Coca-Cola plans to introduce a competitor that represents its biggest gamble on a soda brand since New Coke was introduced 11 years ago and ended up as an embarrassing flop.
Like Mountain Dew, the new brand, known as Surge, will be a bright, greenish-yellow citrus drink that will be high in calories and caffeine, compared to other soft drinks.
Coke has been slow to mount a credible challenge to Mountain Dew, which had retail sales of $3 billion last year in the $52 billion industry, placing it first among so-called heavy citrus sodas. Mello Yello, which Coke has marketed regionally since 1979, has been a distant second.
Mountain Dew has long been celebrated as a case study in how to build a consumer brand. Until recently Dew, as it is known in the industry, was the fastest-growing soft-drink brand.
Pepsico bought Mountain Dew in 1964 and gave it national visibility with cartoony depictions of Li'l Abner-esque characters decked out as moonshiners. Pepsi then increased its popularity with a series of irreverent advertising campaigns aimed at teen-agers and young adults. It has been spending more than $40 million to promote the brand.
The introduction of Surge ``is a major beverage event,'' said John Sicher, publisher of Beverage Digest, an industry publication in Old Greenwich, Conn. ``Mountain Dew has been a tremendous source of profit for Pepsi and it has had virtually no competition.''
Andrew Conway, a beverage analyst for Morgan Stanley & Co., said: ``Mountain Dew gives Pepsi about 20 percent of its profits because it's heavily skewed toward the high-profit vending-machine and convenience markets. In these channels, Mountain Dew is rarely sold at a discount.''
LENGTH: Short : 46 linesby CNB