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19,622 $m

This year, Pepsi celebrated the 40th anniversary of the Pepsi Challenge, its legendary marketing campaign. What began as a simple taste test in 1975 has evolved into a global integrated marketing campaign targeting social media savvy consumers.

The Pepsi Challenge of today has been “reinterpreted for a new generation.” Less focused on Coke comparisons, Pepsi is now homing in on a new breed of Pepsi fan. Long gone are blind taste tests—the new Pepsi Challenge takes on real-life trials that resonate deeply with the millennial generation.

Pepsi is relying on a trait that has helped it stay relevant for the past 50 years: innovation. In an increasingly health-conscious market, Pepsi is addressing growing concerns over aspartame. In August 2015, it created a new Diet Pepsi formula, swapping aspartame for the less-contentious sucralose. There’s also Pepsi True, a low-calorie cola sweetened with cane sugar and stevia that’s sold exclusively through Amazon. Pepsi is also experimenting with different flavors and has even partnered with SodaStream to let people craft their own Pepsi beverages at home. 

These efforts address a major brand challenge: building a new Pepsi generation. The brand is engaging new consumers with campaigns that reinforce both social good and pure enjoyment. For every mention of the #pepsichallenge on social media, for example, Pepsi has pledged to give USD $1 to a group called Liter of Light, which creates, among other things, low-cost solar lamps
from old soda bottles. Pepsi is also sponsoring the hit Fox TV series Empire and recently replaced Coke as the official soft drink of concert giant Live Nation.

The Pepsi brand also benefits from the sustainability initiatives of its parent company, PepsiCo, which have earned the company widespread social clout, along with significant financial returns. PepsiCo’s environmental sustainability programs, across all brands, have saved the company more than USD $375 million since 2010, supporting its commitment to “Performance with Purpose.” PepsiCo’s continued progress on water, energy, packaging, and waste-reduction initiatives have delivered a twofold of business benefits: double-digit net revenue and operating profit growth. Indra Nooyi, Chairman and CEO—who ranked second on Fortune’s Most Powerful Women list in 2015—states, “by continuing to apply our scale and capabilities to address shared societal challenges, we will further strengthen our company and the communities where we operate.”

Pepsi has continued to build momentum (its brand value rose 3 percent on this year’s Best Global Brands report) for a number of reasons, but the clearest reason of all lies in Pepsi’s ability to prove its relevance among younger and more connected as well as more socially conscious and health-savvy consumers.

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