Trend-Setting Pepsi

According to TNS Worldpanel, cola volumes in the U.K. fell 2.3% in 2007. Coca Cola is the market leader in the U.K., but PepsiCo has had the edge when it comes to innovation. Sugar-free Pepsi Max is Pepsi's most successful drink in the U.K.

Coca-Cola's new products, however, have had less of an impact. Coke Zero, launched in July 2006 to rival Pepsi Max, has just 5.3% of the market compared with 7.9% for Pepsi Max, according to Nielsen.

The decline in sales of carbonated drinks in the UK seems to be induced by a steady increase in demand for more natural products. Organic foods and fair trade endorsed products are the norm for many UK shoppers. With increased demand, it’s only natural for brands to premium-ise their more natural product offerings and yet again, it seems that Pepsi’s ahead of Coca-Cola on the trend curve.

Pepsi has launched Pepsi Raw in certain UK test markets and is meant to be a healthier alternative to the traditional cola. A type of Pepsi made from only "naturally sourced" ingredients, it taps into demand for premium, less-processed products.

The product contains zero preservatives, colourants or flavourants. Instead the ingredients of Pepsi Raw consist of apple extract, sparkling water, grapes, coffee leaf and raw cane sugar. The result is a drink that is slightly paler and less fizzy than ordinary Pepsi.

Pepsi themselves have said that Pepsi Raw is the most significant innovation from Pepsi in the past decade and a half. If the product does prove to be a hit, an international roll-out will be undertaken.

Pepsi is supporting the launch with a press and outdoor campaign by Abbot Mead Vickers BBDO starting on March 3. The ads show naked people overlooking a city, their backs inscribed with slogans such as "Go Raw as nature intended" and "Do what comes naturally." There is also a website, pepsiraw.co.uk. As the campaign will only officially launch in early March, the site is currently pretty bare.