Ch20 Article 1 - Lighten Up: Pepsi Sales Force Tries to...

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Page 1 of 5 2009 Factiva, Inc. All rights reserved. Lighten Up: Pepsi Sales Force Tries to Push 'Healthier' Snacks in Inner City --- Chicago Test Targets Minorities But Critics Raise Eyebrows; Tough Sell in Small Stores --- Mr. Herrera Gets a Check-Up By Chad Terhune 2,386 words 5 October 2006 The Wall Street Journal J A1 English CHICAGO -- A new rack of PepsiCo Inc.'s Baked Doritos and Baked Lay's potato chips greets customers inside the door of the Sammy G convenience store here. But most customers who frequent the inner-city store bypass the lower-fat chips. Instead, they grab the 25-cent packages of Flamin' Hot Cheetos and Nacho Cheese Doritos by the cash register. In store slang, those popular snacks are known simply as "quarters." Even so, Rafael Herrera, a 30-year-old district sales manager for Pepsi's Frito-Lay unit, considers Sammy G a big breakthrough for his company's lower-calorie products -- simply because the store agreed to stock them. Managers of other stores he deals with have refused outright. "The baked snacks don't sell as fast," he concedes. Pepsi, with net income of $4.1 billion last year on revenue of $32.6 billion, is one of the biggest sellers of sugary colas and high-calorie snacks. That puts the company in the crosshairs of a growing public-health debate over obesity, nutrition and marketing to children. This year, Pepsi is spending millions on a test program in Chicago, trying to encourage inner-city African-Americans and Latinos to adopt healthier eating and exercise habits -- without seeing any loss in sales for the company. Whether a giant snack and soda maker should proselytize for healthier diets -- or can pull off so contrarian a message -- remains a question within the company's Purchase, N.Y., headquarters and among critics. Beyond selling the idea to consumers, Pepsi must persuade skeptical salesmen like Mr. Herrera, whose pay is driven by sales. Winning over store managers, accustomed to selling huge volumes of colas and salty treats, is even harder. Mr. Herrera, a tall, athletic-looking father of two, grew up in Chicago. His relationships with neighborhood bodegas are one of the company's most-powerful assets. But even he was reluctant to bother customers about the new snacks until he went to an employee health fair and learned some unsettling news about his own health. About 32% of all U.S. adults are obese, according to the federal Centers for Disease Control and Prevention. Obesity afflicts 45% of blacks and 37% of Mexican-Americans. In some of the neighborhoods Pepsi is targeting, more than 40% of children are overweight, according to the nonprofit Consortium to Lower Obesity in Chicago Children. "We want to use Chicago as a lab to understand where should we play, as it relates to health and wellness.
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This note was uploaded on 01/26/2011 for the course MKT 337h taught by Professor Staff during the Spring '08 term at University of Texas at Austin.

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Ch20 Article 1 - Lighten Up: Pepsi Sales Force Tries to...

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