Why Did Pepsi Blue Fail?
Pepsi Blue was discontinued in 2004 due to controversy surrounding the use of Blue 1, a food dye banned in some countries, and an aggressive marketing strategy that may have alienated consumers. Despite its failure, some consumers continue to seek out Pepsi Blue.
In the early 2000s, PepsiCo Inc. developed a business strategy that included aggressive marketing and the creation of new flavors for its soda brands. In 2003, an article in Businessweek outlined this strategy from Pepsi and described the brand's cross-promotion with major events, including the Winter X Games, the Super Bowl and the NCAA basketball tournament. Businessweek noted the low demand for Pepsi's new and uniquely flavored soft drinks, including Pepsi Blue, Pepsi Twist and Mountain Dew Code Red, with sales of those varieties accounting for a mere 5 percent of Pepsi's total soft drink sales.
Business Insider pins Pepsi Blue's failure in particular on its use of a controversial agent called Blue 1. As reported by CBS News, PepsiCo's attempt at subversive marketing for Pepsi Blue is another reason for the brand's failure. Marketers working for PepsiCo posted undercover to online forums, attempting to drum up word-of-mouth excitement about the Pepsi Blue product. This strategy, however, was rejected by savvy consumers who saw through the marketing tricks. CBS News also indicates that, due to the product's high-profile failure, the phrase "Pepsi Blue" has since become a code word amongst online consumers to label corporations that attempt to aggressively, but covertly, market to Internet users.