PepsiCo Strengthens Marketing Practices To Children

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PepsiCo further strengthens its commitment to meeting consumers' health and nutrition needs by redefining how the company markets its products to children.

By the beginning of the year, PepsiCo commits that 100 percent of the company's advertising directed to children under 12 will be devoted to only two of its more than 250 Smart Spot products - products that meet established nutrition criteria based on authoritative statements from the U.S. Food and Drug Administration and the National Academy of Sciences or provide other functional benefits based on consensus science. Less than 1% of PepsiCo's total advertising budget in North America is allotted for kids' marketing, and today, fully half of that is devoted to Smart Spot products.

As one of the first companies to commit as a participant in the Children's Food and Beverage Advertising Initiative (CFBAI) -- an initiative that provides the food and beverage industry the opportunity to announce public and enforceable marketing policies, PepsiCo is making its pledge today at a joint forum hosted by the Federal Trade Commission and Department of Health and Human Services in Washington, DC.

In November 2006, PepsiCo joined 10 of the country's largest food and beverage companies in an effort to strengthen the guidelines of the Children's Advertising Review Unit (CARU). The initiative requires participating companies to devote at least half of their advertising to children under 12 to promote healthier products and/or encourage good nutrition or active lifestyles.

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"As an industry leader in the discussions of children's marketing, we believe children are a special audience and we take particular care developing marketing practices and evaluating programming that carries messages to children," said Antonio Lucio, chief innovation and health & wellness officer for PepsiCo. "We applaud the dedicated work of the CFBAI and this robust initiative is further proof that public and private sectors can work effectively together to help children lead healthy, active lifestyles. PepsiCo does that through the product choices we offer and the funding of programs that support active living."

PepsiCo advertising directed to children under 12 will be devoted to two Smart Spot products, Baked Cheetos, which has 50% less fat than the original brand, and Gatorade, which qualifies as a Smart Spot beverage because it is formulated for more complete rehydration in circumstances where water may be insufficient.

PepsiCo will advertise Gatorade only in association with the promotion of encouraging sports participation and in helping children become competent in sports skills. Baked Cheetos will feature advertising only in association with kids participating in active lifestyles.

This policy includes TV, radio, print and internet advertising as well as third party licensed characters. The PepsiCo pledge meets or exceeds the CFBAI's advertising and nutrition standards.

In addition, PepsiCo pledges that the company will not advertise its products in elementary and middle schools. PepsiCo is the only company to have signed both a beverage and a snacks agreement for products in schools through a partnership with the Alliance for a Healthier Generation - a joint initiative of the William J. Clinton Foundation and the American Heart Association. In May 2006, Pepsi-Cola announced with industry that it will no longer offer full-calorie soft drinks, juice drinks, or teas in any K-12 schools; and will limit the calories and portion sizes of other beverages, including sports drinks and juices. In October 2006, Frito-Lay and Quaker Foods joined industry to set similar, first-ever voluntary guidelines for snacks/foods in schools.

Through the company's major business units, which include Pepsi-Cola and Aquafina beverages, Frito-Lay snack foods, Quaker food products, Tropicana juices and Gatorade sports beverages, PepsiCo is continuously transforming its portfolio to meet consumer needs, including products chosen by young people. As part of that on-going transformation, PepsiCo has improved the nutritional profile of its flagship brands by changing to healthier oils, reducing sugar and sodium content, and expanding the range of products offered. In 2004, PepsiCo launched its "Smart Spot" program. By 2006, these products represented over two-thirds of North American revenue growth.

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