PepsiCo cuts out grocery stores and sells directly to consumers | Hacker News Reader

PepsiCo cuts out grocery stores and sells directly to consumers

forbes.com

80 pointshhs80 comments

This could be mildy interesting if it (eventually) lets people order parts of their catalog that are less well distributed.

There are often limited time flavors that may not warrant shelf space in every store, but likely also don't warrant a lenghty trip to find them. If they could be ordered, that would be nice.

You could maybe get these from Amazon, but it would be better to order direct and have the care and attention to detail in packing that Amazon lacks.

Even a locator to find the limited flavors would be an improvement. I get around enough that some grocery store stocking it would be not too far out of my way to stock up, but I can’t stop at every grocery store in the metro hoping to find it.

https://contact.pepsico.com/pepsi/product-locator

https://www.mountaindew.com/store-locator/

I used these to watch Diet Mountain Dew Code Red slowly disappear from my area, then region, then entire coast over the course of a few years. Haven't had it in ages now.

I was using these when the real sugar dr pepper was a thing, and they never seemed accurate.

At the time, anyway, it felt like they were flagging the whole regional grocery chain as carrying it, when only select stores ever actually had it. I'd go and there would be no stock, and no place on the shelf for it either.

Can't you still get the real sugar Dr Pepper in Texas?

I don't think so - wikipedia reads like "Dublin Dr Pepper" was discontinued in 2012 https://en.wikipedia.org/wiki/Dublin_Dr_Pepper

It may no longer be true, but several decades ago it was possible to find sugar-sweetened soft drinks in the US by looking for kosher labels.

(I have a coke can next to me as I type; it is sugar-sweetened)

In my local grocery stores I've really only seen this for the name brands around passover; there will often be 2-liters of Coke and sometimes Pepsi with yellow bottle caps. But I haven't seen that in canned Coke (it may be seasonally or regionally available). Pepsi markets canned soda with sugar as 'throwback' with classic labelling, seemingly year round, but sometimes intermittently available.

Certain bottling plants use real sugar instead of HFCS. I thought Cleveland did that.

I've never actually seen coke made with sugar in cans! I've always heard of "kosher coke"/"passover coke" but never been able to find it.

Pepsi was selling "Dr Pepper Heritage" (green/yellow cans) and "Pepsi Throwback" for a few years around a decade ago. It was pretty widely available at gas stations in the midwest, although 12-packs of the Dr Pepper was not very common.

"Mexican coke" is still made with real sugar. Costco has it in glass bottles pretty consistently, and sometimes has pepsi in glass bottles with real sugar as well (although the pepsi isn't labeled like it's a Mexico product).

They have glass bottles of pepsi and coke around Kansas City in Mexican grocery stores as well as, oddly enough, the gas stations on the Kansas Turnpike. Half liter bottles are more common in the Mexican stores, but wal-mart often has 12 oz bottles of Mexican coke in the Hispanic section.

Sorry about that. I'm not sure why we get sugar* and you all don't, but it's probably something to do with the invisible hand.

* just checked all the cans in my house. Six-packs in the fridge from the grocery came from the EU, and have sugar. Two-fours in the basement from the discounter came from some nordic-speaking country, and have sugar.

PSA: Don't drink normal Mountain Dew, due to brominated vegetable oil (BVO), banned basically everywhere but US.

Baja Blast is free of it, for anyone looking for a replacement.

It looks like Pepsi has recently removed BVO from normal Mountain Dew.

https://www.usatoday.com/story/news/factcheck/2020/05/28/fac...

Why not just cut out the middleman and eat from a bag of sugar directly?

Don’t think I haven’t :)

Fun Dip was basically exactly this. https://en.wikipedia.org/wiki/Fun_Dip

Wow. What a product. I would have killed to see that pitch meeting. Not only do you just eat sugar out of a bag - but the utensil (stick for feeding) is also made of sugar.

was? I got worried for a minute.

I'm glad it still exists. It's pure junk but much better than soda because it's sold as an occasional treat and not an everyday beverage.

I believe the slogans are "Enjoy Coke"/"Enjoy Sprite" - not fuckin subsist or hydrate with Coke....

The marketing is hard to blame in this case, they're just reflecting the disgusting people who decided to glutt.

I haven't been asked if I want a fun dip with my sandwich.

> just reflecting the disgusting people who decide to glutt.

Surely nobody at your local healthy restaurant or produce co-op is asking you to add a Coke©®™ on?

Not only does this comment ignore any interesting shifts by this move, it appears to have missed even the basics of the offer. I cannot find a way to purchase soda through either website discussed in the article.

I once saw sugared colored water brought from the US sold as food for humming birds at a store here in Panama. Just imagine how much industry would be lost if we had a better education system.

I think the title is misleading. But "PepsiCo recognizes need for shopping without stores and offers home delivery website as an option" doesn't sound as sexy.

This is a more important market indicator then your comment implies. I work for a very large CPG and certain brands, such as food staples are crushing it, but impulse type products are really struggling. With uncertainty around when we return to "normal" companies such as PepsiCo are scrambling to figure out how best to connect directly to the consumer to maintain market share. CPGs are investing a ton of resources testing and learning in this space.

I haven't commented in this community in a long time, but as you all are entrepreneurs it is worth noting that this moment is an opportunity to disrupt 100 year-old entrenched CPG enterprises as the supply chain to the consumer is in disarray.

To save others the lookup:

CPG = Consumer packaged goods

When I was a kid, we were taught in school that before you initialize, you spell it out, and then put the initialism in parantheses afterward.

When I became an adult, I realized that people like to feel better about themselves by using short forms that others wouldn't know.

Eh, if it's part of your job where you're used to using the abbreviation because you're used to everyone around you using it and knowing what it means then sometimes it can be easy to let it slip when having discussions out of work that pertain to your line of work (as with the parent).

Links to the sites:

https://www.pantryshop.com/

https://www.snacks.com/

(Forbes apparently doesn't believe in linking to the site(s) they're talking about.)

Too much like advertising.

Don’t give away what we can sell!

The snacks site asks for a zip code up front. I wonder if that changes what products they will ship?

I'd wager it changes the prices -- PepsiCo stamps the price of the product on the package when they stock grocery shelves.

Grocery stores probably won't take kindly to their supplier undercutting them with cheaper direct-to-consumer pricing.

Hm, a 1-serving bag of baked lays for $1.89, and no larger bag sizes available? No thanks. I’m sure there’s a shipping charge on top of that.

"FREE SHIPPING ON ALL ORDERS. Minimum of $15 required"

Good to know. Still a hard pass based on the per-unit pricing.

With all the hate being lobbed at sodas in this thread it's pretty disappointing that they don't actually sell soda. I rarely eat sweets or have dessert after a meal. Pretty much the only thing I consume that's actually sweet with added sugar is a soda here and there. I find the sugar lite and sugar free alternatives like La Croix and diet coke to just be disgusting and would rather just consume water when I attend some tech event and the host thinks they're doing the attendees a favor by only offering "healthy alternatives". Without a car soda is pretty much the most annoying grocery item to get.

Two liters are pretty much impossible to consume before they go flat unless you drink way too much soda already so only individually packaged sodas make sense to buy. But they are extremely bulky and you pretty much have no room for other groceries.

Online they tend to go for nearly twice the price as the grocery store and they have less flavors. Also the only time I've ever had a delivery cancelled because of a shipping problem is because the sodas weren't packaged correctly and ruined a package. This happened a few times before I realised how badly I was getting ripped off. Buying soda at cost from the manufacturer that actually specializes in soda logistics would have been amazing.

Try SodaStream. You can buy Coke/Pepsi pop syrups and use those instead of the SodaStream ones. Coke/Pepsi won't sell you syrup direct but there are other vendors.

They say they built it in 30 days but I remember an elixir job ad from last year where they were already hinting at selling directly to consumers.

Found it: https://www.pepsicojobs.com/main/jobs/206608BR?lang=en-us

Keep in mind, PepsiCo is huge, and not just 'Pepsi' as its name makes one think. They own or are affiliated with a large portion of your typical drink, snack, breakfast, and juice aisles of the grocery store.

That reminds me of when I was a kid in Ontario and we had pop delivered in refillable glass bottles the way other people had milk delivered.

> "...developed from concept to execution in less than 30 days..."

I can believe that for a website, but I can't believe that about logistics. How is the site's stock being supplied by PepsiCo? Where is it being warehoused? Who's handling fulfillment? Who's handling customer service? Returns?

It goes without saying they must be using a third-party fulfillment center, but still just to set that up, sign contracts, send first (massive) shipments to the warehouse, get all the products registered and stocked... is that possible to do in 30 days for something at the national scale of PepsiCo?

I'm sure there are Pepsi bottling plants in every major city - my workplace is a block away from one.

With a quick process, I assum they're either outsourcing the whole delivery portion, or they're reusing their existing distribution network. Their distribution network may have a lot of excess capacity right now, as many smaller retail outlets are closed or seeing less sales. If uptake is slow, they can learn as they go, and then start advertising as things start working.

Maybe they already offered dropshipping?

Either that, or they use existing partners for reverse dropshipping: they supply the bulk and take the orders, but use an existing grocery chain to do the packing. And of course, if the business works they gradually move to doing it themselves.

Tangentially I never understood. If a consumer would be willing to buy a few year supply of a non perishable product, why isn’t there a way they can purchase at wholesale prices? Assume they’d be buying in the same bulk that a connivence store would buy for a months supply.

For example, if I have a certain protein bar I ate twice a day. Why can’t I buy a years supply at wholesale?

Did you try contacting a wholesaler?

Where would you even find one?

https://www.pepsicopartners.com/pepsico/en/USD/partner/leadg...

Not sure about protein bars, but sodas are often sold as loss leaders at grocery stores when on sale. I doubt you could get them cheaper wholesale.

My grocery usually has soda not in sale so it's $6.50 a 12 pack and I know it doesn't cost that much since it's on sale for $1.62 the rest of the time. Which leads to the soda not being bought or the aisle is empty as the only two conditions

Wow, I've never seen such a stark difference. Normal price for a 12-pack here is probably $5, while sale price might be around $3.

I always wondered if you could heat your house from the aluminum if you got soda in a deep sale. There’s a lot of energy in aluminum.

It certainly takes a lot of energy to produce aluminum from ore. But how would you extract that energy again, burn it?

You probably can. Use the same wholesaler as your connivence would go to, as they probably do not go to the producer either.

Some require a registered company for tax/accounting porpoises, but I have not had any issues buying stuff with my own company which I otherwise only use for consulting.

If you're a Costco member, you can always go to Costco business center [0], it doesn't require a special membership other than the usual Costco one. It's where some of the smaller retailers and restaurants (eg. mom and pop gas stations and convenience stores) shop for individually packaged snacks and drinks.

[0] https://www.costco.com/my-life-costco-business-center-benefi...

Is that cheaper than Costco proper?

You can, but it is not made easy by the producer because the market of people like you is not big enough. Most of these companies deliver by the truck, not by the case, your protein bar for one year is not even one pallet and they are not set up for small distribution.

I'm curious about the economics of this. It appears that both of the new websites offer free shipping with fairly low minimum purchases ($15 and ~$30).

The products being offered almost universally cost a lot to ship (by either being high weight for liquids or high volume for chip bags) while being very low value.

My bet is they’re repurposing the delivery vans and light trucks normally used to restock restaurants, vending machines and like. If they get the route planning right it’s not so bad but probably gives worse margins than their grocery store channels.

I can see a case in some places for some people; for example during the pandemic lockdown I ran out of some of the stuff I usually buy; for me ordering 3 months worth of stuff 4 times a year and delivered directly at home is much more convenient than buying it weekly or every 2 week together with the usual grocery. I am lucky to have the space to deposit 3 months of their product (we don't consume too much of it, just juice and some Pepsi Twist) and for the right price and convenience I would be a great client for them; I would even do a subscription with automated payments, like the netflix one.

Not a bad idea. I can think of a couple improvements:

1. Let me search, I don't want to scroll through a hundred options.

2. Bring more flavor variety. Hello, ketchup chips!??!

I read about a large beer brewer doing this recently too, testing the concept in Brazil first - I think it was AB InBev. I think if makes sense to open a new sales channel, but it can't be easy for a manufactering org to build the processes and infrastructure for this - it must be like starting a whole new company from scratch.

Pepsi didn't stop selling to grocery stores. They just started selling directly to consumers in addition to their existing channels.

Coke has been doing this for years...

Why not work with those home soda machine makers and sell the syrup packages to end consumers so they have freshly made soda of whatever flavor they order?

It’s more about pepsiCO than Pepsi

those exist here, in both carbonated and non-carbonated versions.

(then again, we have milk-paste in toothpaste-like tubes that can be reconstituted with water; I suspect the main market for all of these are summer cabins that are both off-the-grid and not close to the road network)

They own SodaStream already, and you can get syrup packages of Pepsi Max, 7up etc.

Tap water quality is generally terrible for carbonation and it would result in a poor product

Why is that? I am genuinely curious but did not find any good links. I use filtered water from a Brita system with my Sodastream and it definitely does not taste like, or as good as, industrial carbonation. I had always assumed the limiting factor was the amount of pressure the system can withstand so the water is not as carbonated.

The way the syrup mixes with the carbonated water is different in a commercial pop tower and causes a better mix. I think you're correct about carbonation as well.

Any time you've had fountain pop it's just been made with straight municipal tap water.

Any idea how much snacks.com could have sold for? A quick Google search didn't bring anything up. I'm guessing at least low 7 figures...

The main value would be to avoid retail markup and give costumers those wholesale prices. The article seemed quite in that point.

I get the combination of products around a theme (like ‘breakfast’). But if you want to sell around breakfast, at least add milk.

The title implies that Pepsi will stop supplying grocery stores, while the article makes no such claim. Very misleading.

PepsiCo products are typically very unhealthy options. Giving consumers more access to them is bad for public health.

I typically support the free market, but I think most of their products are addictive and harmful enough to have their costs increased and supply limited similar to Tobacco and Alcohol products.

https://www.fastcompany.com/90425011/coca-cola-nestle-and-pe...

Not to mention they're among the largest plastic polluters in the world next to Nestle and Coca-Cola.

https://content.sierraclub.org/evguide/blog/2014/07/how-much...

Ok, what about ice cream and morning pastries? That said I’m for taxing sweeteners accordingly.

Nothing like Pepsi straight from the cannery. That fresh crack, that sweet tang, it just hits different from the kind you buy at the store.

I wish! No straight-up soft drinks available: only “hydration products”... (must be higher margins)

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