MEN IN BLACK SUITS and dark sunglasses skulk through the aisles of a convenience store searching for their quarry: teenagers who defy convention by buying a certain brand of lemon-lime soft drink that turns them into “Uns.” Meanwhile, from their control room in a satellite circling Earth, the agents’ bosses—sinister leaders of the “Anti-Refreshment Syndicate”—zero in on two Uns in the convenience store attempting to buy the Uncola—7 UP, of course—and instruct the agents to stop them. Will the syndicate succeed in its evil scheme? Or will the independent young Uns pop the top on a 7 UP and save the world from a cola conspiracy? If the story line gets too intense, just keep repeating, “It’s only a commercial.”
Actually, it’s only one commercial among many that the millions of fans watching this month’s Super Bowl will see during the game’s expensive and highly hyped commercial breaks. But for Dr Pepper/Seven Up, Inc., those 30 seconds could make a difference for years: The satellite spot and a commercial with a football story line (in which a syndicate-controlled coach tries to push a sports drink on his players) will kick off a new three- to five-year ad campaign designed to give the soft drink a fresher, younger image and bolster a brand that has been losing ground to the Cola-Cola Company’s Sprite. Once the nation’s third top-selling soft drink, 7 UP has slipped to eighth place, with a market share of only 2.3 percent of total soft drink sales, according to Beverage Digest. That’s less than half of Sprite’s 6.2 percent. Meanwhile, thunderclouds loom on the horizon in the form of Storm, a new lemon-lime soft drink that the Pepsi-Cola Company is test marketing in seven states (although not in Texas). Unlike 7 UP and Sprite, Storm contains caffeine.
7 UP’s vulnerable position is totally unacceptable to Cadbury Schweppes, the London soft drink and candy giant that in 1995 paid $1.7 billion to acquire Dr Pepper/Seven Up (it already owned 25 percent of the company). So the number three U.S. soft drink company, behind Coca-Cola and Pepsi-Cola, is going for blood—young blood. In a radical change from past advertising that appealed to older audiences, the new 7 UP spots—developed by the company’s longtime New York ad agency, Young and Rubicam—are much hipper and edgier. Borrowing from the successful Uncola campaign of the sixties and seventies, the new “Are U an Un?” ads play off the conspiracy themes of The X-Files and the cheeky style of Men in Black. A series of fifteen-second teasers began running in December in which Anti-Refreshment Syndicate agents show up in unexpected places, like high school lockers, or their faces appear in the bottom of popcorn buckets at the movie theater, sending young people shrieking for the exit.
It’s all part of the Plano-based company’s plot to win over 12- to 24-year-olds, traditionally the demographic that consumes the most soft drinks. But that thirsty group has viewed 7 UP as unexciting and stodgy, according to extensive surveys conducted by the company. “They describe the image of 7 UP as bland, old, and boring—what we’ve come to refer to as the B.O.B. factor,” said John Clarke, the chief advertising officer of Dr Pepper/Seven Up, at a meeting of 7 UP bottlers in the fall. Unlike previous ad campaigns that focused on 7 UP the drink, the new ads are aimed at the prospective drinker: “Un is the independent thinker who isn’t going to let a bunch of knuckleheads get in his way and tell him what he’s going to drink,” says Jim Trebilcock, the senior vice president of marketing for Cadbury Beverages/Seven Up, the division of Dr Pepper/Seven Up that markets 7 UP and other Cadbury brands, including A&W Root Beer, the Schweppes and Canada Dry lines of mixers, Crush (orange and other flavors), Hires Root Beer, Squirt, and Sunkist.
Lots of Uns will be needed to save the Uncola from the unthinkable. No one is on a deathwatch for 7 UP, but company executives have admitted that the brand is in a fight for survival. Dr Pepper, on the other hand, is racking up record sales, especially in Texas, where the drink was born in a Waco drugstore in 1885.
Dr Pepper/Seven Up will spend unprecedented amounts in 1999—the company won’t say exactly how much—on the new 7 UP ad campaign as well as on advertising for Dr Pepper and Diet Dr Pepper. Nothing the company has tried before has succeeded in boosting 7 UP’s market share, not even a reformulation early last year to give it a crisper taste. Instead of rising, sales fell 2 percent in both the first and second quarters of 1998 and were flat in the third.
7 UP is no stranger to adversity and advertising shifts. An adman named C. L. Grigg created the drink in St. Louis in the twenties and introduced it in October 1929—just two weeks before the stock market crash. In its early years 7 UP was caramel-colored and had an unwieldy name, Bib-Label Lithiated Lemon-Lime Soda. And talk about competition: There were more than six hundred lemon-lime sodas on the market at the time. Still, 7 UP not only survived but by the late forties was the world’s number three soft drink. Its advertising evolved from early slogans like “You Like 7 UP . . . 7 UP Likes You” to the popular Uncola campaign introduced in 1967 to the Spot commercials of the late eighties, which turned the red dot in the 7 UP trademark into a cartoon character. The “It’s an Up Thing” campaign debuted in 1996 and ran until the new, reformulated 7 UP hit the market.
No one at Dr Pepper/Seven Up expects the new Un commercials to lift 7 UP sales overnight. “Turning around a soft drink is like turning around a supertanker,” says John Sicher, the editor of Beverage Digest. And success hinges on other factors as well. “Advertising is only as good as making sure the product is available, packaged, priced, distributed, and merchandised,” says Michael McGrath, the president and chief operating officer of Cadbury Beverages/Seven Up. “It’s all about completing the cycle.” That has been part of the problem. 7 UP has been hampered by a bottling system that has been erratic at getting the product to consumers at competitive prices and ineffective at securing strong display space in stores. (Bottlers buy the soft drink syrup, mix it with carbonated water, package it, distribute the final product to retail and wholesale outlets, and negotiate display space and pricing.) “We’re getting our you-know-whats kicked,” said a frustrated McGrath at a meeting of 7 UP bottlers this past fall.
Changes in ownership haven’t helped, either. Tobacco giant Philip Morris bought the Seven Up Company in 1978 and sold it eight years later to a Dallas buyout firm, Hicks and Haas (now Hicks, Muse, Tate, and Furst), which had also acquired Dr Pepper and then merged the two companies. By then Coca-Cola was pouring big bucks into marketing Sprite, which in 1986 pulled ahead of 7 UP in market share for the first time. And 7 UP’s rivals have gotten more aggressive with distribution, consolidating their bottling systems into larger, more efficient operations (Coca-Cola owns close to 44 percent of its largest bottler, Coca-Cola Enterprises, and the Pepsi Bottling Group, which makes Mountain Dew and is test-marketing Storm, is a unit of Pepsi-Cola). “It’s not just a battle of brands anymore; it’s a battle of brands and systems,” says Todd Stitzer, the Harvard- and Columbia Law School—trained corporate attorney who took over as president and chief executive of Dr Pepper/Seven Up in 1997. His company is in a unique position in the industry because it works with all types of bottlers—large and small independents as well as bottlers that also make Coke and Pepsi. In fact, it may surprise many die-hard Dr Pepper drinkers to learn that most of the drink is produced by Coke and Pepsi bottlers.
When Cadbury Schweppes crossed the Atlantic and began acquiring leading brands like A&W root beer, Dr Pepper, and 7 UP, it quickly became a threat to Coke and Pepsi. While the Coke and Pepsi bottling systems have continued to support Dr Pepper and 7 UP, most of them have dropped some other Cadbury brands, like Sunkist orange soda and A&W, in favor of their own rival drinks, like Coca-Cola’s Citra, a citrus-flavored drink, and Pepsi’s Mug root beer. So Cadbury had to move some of its beverages to independent bottlers in some markets. “We have experienced the soft drink industry version of ethnic cleansing,” says John Brock, the managing director and chief executive officer of Cadbury Schweppes’s global beverages operation.
And now the Storm clouds are gathering. If Pepsi decides to market its new lemon-lime drink nationwide, Pepsi bottlers might drop 7 UP. Last year, seeing some of its brands in danger, Cadbury Schweppes—in a joint venture with the Carlyle Group, a Washington, D.C., buyout firm—created the American Bottling Company. It will be 7 UP’s largest bottler and will make Dr Pepper and other Cadbury brands as well as outside brands like Royal Crown cola and Snapple.
But all of this still may not be enough in a business where size does matter. Coca-Cola and Pepsi have been duking it out in a vicious cola war that is reverberating through the soft drink business. They’ve been battling to sign exclusive agreements with sports stadiums, airports, fast-food chains, even entire school districts. Dr Pepper/Seven Up hasn’t been completely shut out of the competition—the Dr Pepper Bottling Company of Texas has signed a deal with Dallas Cowboys owner Jerry Jones (in 1995), who also signed a deal with PepsiCo, and with the Grapevine-Colleyville School District (in 1997)—but most of the megadeals have favored Coke and Pepsi (see Texas Monthly Reporter: “Soda Flop,” December 1998). “These practices are not in the best interests of the industry and certainly not in the best interests of consumers,” says Cadbury Schweppes’s Brock, adding that freedom of choice is at stake.
With its ads that conjure up a villainous soft drink syndicate, Dr Pepper/Seven Up is both taking a swipe at its competitors and making a statement about its industry. X-Files conspiracy theories aside, one thing’s for sure: Everybody in this cutthroat business is watching everybody else—and everybody else’s commercials—very carefully. In advertising, at least, the “Un” truth is out there.