Product Innovation

The launch of Frawg marks many firsts: The first time a major soft drink company, PepsiCo, has created a new brand for a single retailer, the first time 7-Eleven has introduced simultaneous flavors on both the Slurpee and fountain machines and the first apple-flavored carbonated beverage from one of the major soft drink companies. With Frawg, Pepsi has created and launched a successful, unique product that caught on with consumers while bolstering its core brand. That's why the company took home top honors for Product Innovation at the 2005 Consumer Goods Technology conference. In this exclusive interview, Julie Nelson, senior national accounts sales manager for PepsiCo, unveils the method behind Frawg's madness.

At what point during the process did you begin to collaborate with 7-Eleven on the Frawg concept? What did 7-Eleven bring to the table?
We surfaced the product concept of a green apple flavored soda to 7-Eleven in Q1 of 2004 -- concept only. The intent was to test the product in FTN exclusively at 7-Eleven in order to determine viability for broader launch potentially in 2007. The reason we chose 7-Eleven was the sheer scale of its business, the ability to reach consumers in all major U.S. markets and the huge teen population base that it attracts -- which is the bullseye consumer target for Frawg. We worked side by side with 7-Eleven to co-create the brand personality and marketing tactics for this product. We hosted a huge meeting in New York in Q4 2004 where we brought in cross functional experts from all facets of our business -- including R&D, brand marketing, customer marketing, sales, outside creative agency teams and 7-Eleven category merchandising personnel. During this one day session we fleshed through several different exercises in order to tightly define the brand essence, target audience, in-store marketing ideas, etc. This is really the genesis of how Frawg came to be. We then took all of the ideas collected during that day and culled them down to a laser focused marketing plan that could be executed in 7-Eleven's stores. We landed on a final launch plan in Q1 2005.

Did any eye-opening details about Frawg emerge during the testing and focus group process?
Consumer response has been positive all the way through the process. Initially, we conducted on-line focus groups where consumers told us we were on track with product positioning and the creative. We believed so strongly in product taste that we launched FRAWG nationally in 7-Eleven stores July 2005. Consumers tell us they love the great taste and hope that FRAWG is a permanently available at 7-Eleven.

The rollout of the Frawg initiative was a speedy process from start to finish. Did you consciously make an effort to make this product launch a fast turnaround or did it just happen that way?

We didn't set out to be national so quickly. Our initial plan called for a one or two market test. 7-Eleven believed so much in the product and positioning that it decided to forego the test and launch nationally. We think the confidence came about through collaborative marketing developed with 7-Eleven. We are glad it had the foresight to launch nationally. The product is a big hit with consumers.

Is the product innovation strategy used for Frawg a model for Pepsi to follow on future endeavors?
Yes, 7-Eleven is a fantastic partner. It has the agility to move fast in terms of product distribution and marketing execution from in-store merchandising through broadcast production and planning. Pepsi will strongly consider leveraging 7-Eleven as a national learning lab in the future. It's a win-win. Pepsi gets to test lots of ideas, 7-Eleven gets a steady stream of innovation, that for a limited time, can't be purchased anywhere else.