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Urban cool and Mountain Dew are two phrases that don’t usually go together. PepsiCo (PEP) is trying to change that. The snack and beverage giant built the country’s best-selling non-cola soft drink thanks to its popularity with primarily white consumers in the Plains states and the Southeast. Now it’s working to broaden the sugary, caffeine-laced drink’s appeal with young blacks and Latinos.
In a marketing push featuring hip-hop star Lil Wayne and street skateboarder Paul Rodriguez, PepsiCo is hoping Mountain Dew will catch on in urban centers such as New York, Miami, and Los Angeles just as it has in rural areas such as Nebraska and Kentucky. “Our biggest opportunities are in those areas with the highest concentration of consumers who probably haven’t heard the Dew message as focused as we could have” made it, says Brett O’Brien, vice president of marketing at Mountain Dew.
Mountain Dew has been a bright spot in PepsiCo’s brand portfolio, outperforming Pepsi-Cola over the past two years. There’s cause for worry, however. The brand that accounts for 20 percent of PepsiCo’s U.S. beverage sales lost share last year while Coca-Cola’s (KO) Sprite and Fanta gained. Meanwhile, Mountain Dew’s target market—young people from 18 to 24—are increasingly more diverse. The trick for the world’s second-largest soda maker will be to reach these new audiences while holding on to core Dew fans. From 2000 to 2010, the percentage of white non-Hispanics younger than 24 fell to 18.6 percent of the U.S. population, from 21.5 percent. And though whites make up 70 percent of soda drinkers, they are 80 percent of Dew consumers, according to iTrack Data figures provided by PepsiCo.
The new “This Is How We Dew” TV advertising campaign debuted in April and features Lil Wayne. “If you got anything from me, it’s to find your thing and do you,” he says over clips of concert footage and skateboarders. “We all know it’s not what you do, it’s how you do.” The initial ad mixes in snowboarders and a country singer to keep the brand’s mainstream hooked in. Future versions will target regional tastes and pastimes.
Look at a map of the U.S. showing Mountain Dew’s top-selling states and you’ll find a swath reaching from North Dakota east to the Virginias and then swinging back to Arkansas. Dew even outsells Coca-Cola in convenience stores in Georgia, Coke’s home state. Dew’s weakest territory stretches from California along the southern U.S. border to Louisiana.
Mountain Dew, once a nickname for moonshine liquor, was created in the 1940s by Ally and Barney Hartman as a lemony soda and spirits mixer. Early bottles featured a gun-toting hillbilly chasing a federal agent from an outhouse. PepsiCo bought the brand in 1964 but kept the down-home image: Its first TV ad used the slogan, “Ya-hoo! Mountain Dew! It’ll tickle your innards.” A barefoot, one-toothed mountain man raved, “Shore as shootin’, there’s a bang in every bottle,” as a curvy woman wearing a hair bow and Wilma Flintstone-looking dress took a sip.
The new campaign—targeted at consumers in their teens to 20s—includes TV and radio ads built around a diverse lineup of seven celebrities whose appeal is tailored to regional markets. Country star Jason Aldean’s spot might be in heavy rotation in Nashville, for example, while Lil Wayne woos TV viewers in Los Angeles. Mexican-American professional skateboarder Paul Rodriguez, aka P-Rod, appeals to a street-skate set that is racially diverse, O’Brien says, and his spots will air in multiple markets. “It’s been a matter of messaging,” he says. “We haven’t really talked to this differentiated, emerging teen base as much as we have that heartland consumer.”
Lil Wayne’s collaboration with Mountain Dew marks his first endorsement deal with a major consumer-products brand. Next month a promotion called DEWeezy—a mashup with his nickname, Weezy—will invite consumers to help the tattooed Grammy winner produce a 30-second TV spot for the drink.
Dew’s campaign will be coupled with a distribution push in urban centers such as New York City, where often only the original version is carried. Flavors including cherry Code Red and orange LiveWire, as well as diet varieties, may be added at gas stations and convenience stores, where 45 percent of all Mountain Dew is sold.
The bottom line: Mountain Dew, which accounts for 20 percent of PepsiCo’s U.S. beverage sales, is trying to attract more black and Latino drinkers.