Obama: the Pepsi candidate.

Who's winning, who's losing, and why.
Aug. 21 2008 6:56 AM

Obama: the Pepsi Candidate

The Democratic presidential nominee and the soft drink have strong affinities.

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It also skewed black, which is the source of Pepsi's unusually close relationship with the African-American community. Beginning in 1940, Pepsi was almost alone in the corporate world in hiring African-American salesmen and in specifically targeting the African-American consumer, about whom there was very little reliable data. This was a risky strategy, as any company seen as overtly trying to appeal to blacks could well have found itself boycotted by Southern whites.

And indeed, Pepsi's strategy created friction internally. According to Stephanie Capparell's 2007 book, The Real Pepsi Challenge, even Pepsi President Walter Mack—who was responsible for hiring the African-American sales team—seemed conflicted about it. At a 1949 company event at New York's Waldorf-Astoria Hotel, he told the crowd: "[W]e're going to have to develop a way whereby [Pepsi] will no longer be known as a nigger drink," causing at least one African-American salesman to walk out of the meeting. Nevertheless, the company continued to foster a strong relationship with African-Americans in its marketing and in its employment practices.

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Pepsi's political and marketing agenda these days is much more complex. In recent years, Pepsico and others in the food and beverage industry have tried to persuade Congress to pass a "uniformity for food" law, whose main effect would be to nullify tough California labeling regulations, which forced Pepsi to stop printing soda labels in Mexico that contain lead. Pepsi also pays close attention to anti-obesity regulations—in addition to "sugar water," as Steve Jobs memorably described it to John Sculley, then president of Pepsi, it also sells potato chips and Cheetos—and keeps tabs on local prohibitions against bottled water. And one of the company's most high-profile executives is General Counsel Larry D. Thompson, who was deputy attorney general in the Bush administration and is co-chair of the lawyers' steering group for McCain.

As for Obama, for all of Pepsi's positive associations with youth and African-Americans, there are nonetheless disadvantages to being a Pepsi candidate. The soda is a perpetual runner-up, like Avis or Burger King. Moreover, Pepsi does not lose out to Coke because its product is inferior. For decades, participants in blind taste tests—the "Pepsi Challenge"—have preferred Pepsi's sweeter, citrusy, slightly less-carbonated flavor. Yet consumers consistently choose Coke in larger numbers, an anomaly usually attributed to Coke's marketing and packaging. But another theory, argued by Malcolm Gladwell in Blink, is that Pepsi's sweetness appeals more in a sip than over the course of a whole can.

For a candidate who earlier this year lost several primaries in states where opinion polls showed him ahead, that is a worrisome analogy. And perhaps that's why, on the day Obama is scheduled to make his acceptance speech, he's moved the proceedings out of the Pepsi Center and into Invesco's Mile High Stadium. Accepting the nomination in a football stadium named after a wealth management firm ... now that's the choice of a new generation.