The products will be “broadly targeted to teens and adults,” notes the company, but Pepsi's venture into vanilla comes on the heels of news about Vanilla Coke's decline. Some estimates put the year-versus-year sales decline at 66% in retail channels.
These results have some analysts rethinking the notion of line extensions as a means of driving long-term sales of carbonated beverages. After studying line extensions, particularly Vanilla Coke, Credit Suisse First Boston analyst Andrew Conway reported, “The brand's inability to expand the category casts doubt on whether innovation is an effective means of accelerating carbonated soft-drink growth.”