PepsiCo Replaces Coca-Cola As Live Nation's Official Soft Drink, Bottled Water Partner

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Music's cola wars are heating up again. PepsiCo announced a new multi-year partnership with Live Nation as the music company's official carbonated soft drink and bottled water partner, replacing previous partner Coca-Cola, which inked a five-year deal in 2009.

Participating brands include Pepsi and Mountain Dew. Simon Lowden, chief marketing officer for PepsiCo's North American Beverages, and Russell Wallach, president of Live Nation Media & Sponsorship, were expected to elaborate on the deal in a panel hosted at the Fast Company Grill during South By Southwest Monday (March 16) afternoon.

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As part of the agreement, PepsiCo will have exclusive pouring rights at 75 of Live Nation's U.S. amphitheaters, clubs and theaters, and will also provide exclusive "Out Of The Blue" experiences with Live Nation artists around their tours including sound checks, meet & greets, ticket access and other tour and festival tie-ins. Initial participating artists include Ricky Martin and Imagine Dragons. Additionally, Pepsi will sponsor Live Nation festivals FarmBorough (the inaugural New York City country music festival), Lollapalooza (via recent acquisition C3 Presents) and the Voodoo Music + Arts Experience. 

"Our partnership with Live Nation elevates our robust music platform to new levels," Adam Harter, Pepsi's VP, consumer engagement, said in a statement. "For decades, Pepsi has been a leader in music and has always focused on providing fans with unparalleled access to great music and their favorite artists. Live Nation will play a dynamic role in our new 'Out of the Blue' music campaign as we deliver new and exciting music experiences in a way only Pepsi can deliver."

The Live Nation deal should help further cement Pepsi's pole position as the U.S.' largest event sponsor, according to analytics firm IEG, having spent more than $350 million on live events in 2013 (compared to No. 2 sponsor Coca-Cola's $290 million.) But it also arrives at a turning point for both Pepsi and Coke's North American business, as its flagship sugary sodas face continued sales declines as consumers turn to healthier options. Indeed, in its fourth-quarter 2014 earnings, Pepsi reported a 2% decline in carbonated soft-drinks sales volume, while non-carbonated beverages grew by 4% in the same period. Coke, by comparison, saw flat sales for sparkling beverages in its fourth quarter while still beverages increased by 3%.

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Such changes are being felt in the companies' respective marketing organizations. In previous years, music strategies were led by executives with global roles -- Frank Cooper at Pepsi, Emmanuel Seuge at Coca-Cola. But in recent months, both companies have been re-structuring their marketing teams to better tackle the U.S. market with an emphasis on music and cultural marketing. In September, Pepsi hired Emma Quigley as its new U.S. head of music (with Cooper focusing on more global programs like 2014's Beats Of The Beautiful Game), and in January, Coca-Cola shifted Seuge's role from global VP-market alliances to North American VP of content (Joe Belliotti, Coke's former global music head, has also taken on a U.S.-centric music role.)

Pepsi introduced "Out Of The Blue" in February with a series of spots during the Grammys featuring Charli XCX and Fall Out Boy to kick off a 100-day program of giveaways and exclusive experiences. Fans automatically enter to win prizes on Twitter by following the @pepsi account, posting a picture with any Pepsi product and using the hashtag #OutOfTheBlue through May 18.

Live Nation Inks 26-Festival Sponsorship Deal With Smirnoff For EDM 

Live Nation, for its part, is having an eventful 2015 in the sponsorship department. In the past two months alone, the company has announced new alliances with Hilton Hotels and Smirnoff Vodka, with a similar pouring-rights deal with Anheuser Busch quietly renewed at year's end. Overall, Live Nation reported a record $300.3 million in sponsorship and advertising revenue in 2014, a 5% increase from 2013.

"We are looking forward to this long-term alliance with Pepsi, as we are perfectly positioned to further the brand's music platform," Live Nation's Wallach said in a statement. "We are passionate about bringing incredible music experiences to consumers, and that mission will be at the heart of all the programming we develop together with Pepsi."


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