UPDATE 2-PepsiCo sees $650 million in snacks for women

Thu Feb 19, 2009 5:06pm EST

Related Topics

* PepsiCo introducing Smartfood popcorn clusters in March

* Sees $650 mln opportunity in snacks for women

* Will now distribute Rockstar Energy Drink

* Commodity costs easing yet still inflationary in 2009 (Adds details on Rockstar, bylines, NEW YORK dateline)

By Martinne Geller and Jessica Wohl

NEW YORK/BOCA RATON, Fla., Feb 19 (Reuters) - PepsiCo Inc (PEP.N), whose well-known snacks include bags of Doritos, Fritos and Lay's chips, is aiming a new snack at women looking for a low- calorie, healthier alternative.

Smartfood popcorn clusters were introduced on Thursday as the company's first snack targeted specifically at women.

The clusters combine sweet and salty flavors, have no artificial colors, flavors or preservatives and come in 120-calorie packages tucked into a white box with purple details. PepsiCo sees an estimated annual opportunity of $650 million in additional sales to women and said the majority of women snack more than men.

Pepsi, the maker of soft drinks such as Pepsi, Tropicana juice, Lipton tea and SoBe Lifewater, also said on Thursday that it signed a deal with Rockstar Energy Drink to distribute the caffeinated beverage through its bottlers, which include Pepsi Bottling Group Inc PBG.N and PepsiAmericas Inc PAS.N.

Terms were not disclosed for the deal, which expands Pepsi's portfolio of energy drinks that already includes Amp, No Fear and certain Starbucks (SBUX.O) bottled drinks.

Sales of energy drinks, which often appeal to younger adults, have far outpaced other soft drink categories in recent years. According to Beverage Digest, energy drink sales rose 7.9 percent in the first 9 months of 2008.

Rockstar, which has 14 percent of the U.S. energy drink market, saw sales drop 2.7 percent in the same period. Hansen Natural Corp's HANS.O market-leading Monster saw sales rise 17.9 percent by contrast, according to Beverage Digest.

"Even though Rockstar has not been performing well recently, it's still a major and important energy drink brand and Pepsi is smart to lock it in," said John Sicher, the trade publication's editor and publisher.

PepsiCo expects commodity costs to ease this year, yet still be inflationary, John Compton, the chief executive of PepsiCo Americas Foods, said on Thursday. Going into 2010, he expects commodities to be deflationary.

Compton, speaking at the Consumer Analyst Group of New York conference in Boca Raton, Florida, also said PepsiCo's Frito- Lay snack unit is bringing out new curved displays where it will showcase healthier snacks to appeal to women who do the majority of food shopping.

Pepsi shares closed up 1.3 percent at $52.20 on the New York Stock Exchange. (Reporting by Jessica Wohl in Boca Raton and Martinne Geller in New York; Editing by Bernard Orr)

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