PepsiCo evolves its direct-to-consumer approach for Canada

The CPG has diverged from the strategy of its U.S. counterpart by incorporating a shop within its Tasty Rewards platform.
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Last May, as consumers turned to online channels for their snacks and beverages, PepsiCo’s U.S. business launched two direct-to-consumer sites, taking them from concept to execution in less than 30 days.

The first site, PantryShop.com, enabled customers to order curated pantry kits like “Rise & Shine” and “Family Favourites” containing top-selling SKUs from across the CPG’s family of food and beverage brands, including Quaker, Gatorade, SunChips and Tropicana. The second, Snacks.com, allowed consumers to order Frito-Lay products, including those from brands like Tostitos, Cheetos and Ruffles, as well as nuts, dips and crackers.

After a year of watching and learning from its U.S. counterparts, PepsiCo’s Canadian division has now launched its own direct-to-consumer offering – one that Ian Adler, CMO on the foods business, believes can help unlock greater consumer engagement, open new test-and-learn opportunities, and further transform its CRM and brand content hub into an all-encompassing consumer destination.

Tasty Rewards Shop was inspired by Snacks.com and has a similar look-and-feel. However, in addition to offering fewer products than Snacks.com – for example, Quaker products are not currently available to order in Canada pending further infrastructure and operational investments – there is one notable difference in the approach behind Tasty Rewards Shop: unlike its U.S. counterpart, the site has been integrated into the CPG’s existing Tasty Rewards platform, whose database includes several hundred thousand members.

This means that unlike in the U.S, where consumers are pushed to different online destinations, consumers in Canada can peruse Tasty Rewards’s content hub, which includes coupons, contests and recipes, before ordering directly from the site. Adler says the model enables PepsiCo to leverage the equity behind Tasty Rewards, while creating a more seamless shopping experience.

“For us, it made sense to say, ‘If we’re here and we’re talking to you about our brands, and we’re sharing emails with many, many Canadians several times per week [through Tasty Rewards]… then why not offer them the opportunity to purchase our products as well,” he says.

The CPG began piloting the offering in the Greater Golden Horseshoe area on May 18, and is exploring the possibility of rolling it out to further regions.

There were additional steps required to incorporate shop functionality into Tasty Rewards, which is part of the reason the DTC offering is launching later in Canada, according to Adler. He says the Canadian division was also focused on “safety and business simplicity given the state of COVID in Canada.” While the team “thought we would probably be out the door a little earlier,” he says PepsiCo wanted to be confident it had all the fundamentals right before launching.

Using Canada as a potential test market for an integrated offering makes sense. Adler notes that Tasty Rewards was pioneered in Canada and says the Canadian team will “share learnings regularly with U.S. and other global PepsiCo digital teams” as it continues to explore new ways of engaging consumers.

At a North American level, the company has already spent a year experimenting and learning what consumers want from the offering. In December 2020, Snacks.com introduced a “make your own” variety pack option in 24 U.S. states. At the time, the company said shopping for snacks online had grown 100% year-over-year and that its own research indicated two out of three Americans would be more likely to purchase a variety pack if they had the ability to customize it.

In Canada, consumers can mix-and-match products to create a 20-count, snack-size variety pack, or they can shop by brand, flavour, snack type or occasion (such as entertaining, movie night, or work or study break) from an assortment of around 150 SKUs. Adler says the variety pack option has been a big hit in the U.S., and he expects Canadians will also gravitate towards it, as it offers flexibility to families and makes a convenient gift for graduations, birthdays, and other celebrations throughout the year.

Moving forward, PepsiCo plans to experiment with new features and functionality, as well as marketing its contests, offers and content around specific occasions, such as the Grey Cup and Super Bowl, following the eventual return of large gatherings and sporting events. It also sees an opportunity to test new product innovations, such as a line of Lay’s flavours that were among the most popular in India, such as Magic Masala.

“We just know there’s so much potential, so many ideas, and just how do we walk, before we sprint?” Adler says. “We’re speed walking – we never walk at PepsiCo – we speed-walk to jog, for sure. But there are so many ideas that we have.”

PepsiCo worked with Montreal’s BAM Strategy on the launch, with its internal IT department supporting on platform integration.