PepsiCo to Debut Pepsi Cafe, a Coffee-Cola Drink

Pepsi is about to get a whole lot more caffeinated. The company is set to launch a new kind of bubbly beverage that’s a combination of cola and coffee and there’s truly nothing like it in the United States right now.

The two beverage giants have tried coffee-cola drinks before. Pepsi introduced the short-lived Pepsi Kona in 1996. In 2004, Pepsi tried another variant internationally called the Pepsiccino, a creamier version meant to taste more like cappuccino. Both iterations inspired the taste of Pepsi Cafe, which took more than a year and half to develop.

Coke's version, Coke Plus Coffee, is available in international markets, but the Atlanta-based company has not announced a U.S. launch despite months of speculation.

"We want to be first to market, and launch this really in the right way," said Todd Kaplan, Pepsi's vice president of marketing.

Pepsi Cafe will come in two flavors: original and vanilla. The coffee-infused cola beverage has nearly twice as much caffeine as regular Pepsi.

The reintroduction of coffee-cola drinks comes as U.S. soda consumption continues to decline annually. But Pepsi and Coke are betting that consumers would still like an afternoon pick-me-up that combines the taste and carbonation of soda with coffee flavors.

"We leveraged both of those learnings and then went to the consumer groups and said, 'OK, what is the right space?' And it's somewhere right in the middle," said Danielle Barbaro, director of research and development.

Coke's first attempt in the category, Coca-Cola Blak, came to market in 2006 but was discontinued two years later. In 2017, Coke introduced Coca-Cola Plus Coffee in Australia. A year later, the company brought it to Asia for more tests after tweaking the formula.

"We know they have a product as well, but we feel great about the product that we developed," Kaplan said.

Shares of Pepsi, valued at $191 billion, are up about 24% this year, as of Wednesday's close. Coke's stock, which has a market value of $231 billion, has risen nearly 14%.

December 17, 2019