Pepsi Blurs the Lines Between Virtual and Physical Worlds

As brands continue to grapple with where they fit into cryptocurrency-adjacent trends, from non-fungible tokens (NFTs) to the metaverse, PepsiCo CMO Todd Kaplan has worked to make sure the food and beverage giant isn't left behind by this fast-changing technology. Kaplan has overseen a series of NFT releases called Pepsi Mic Drop that also seek to further the beverage giant's longstanding association with the music industry. The brand has also created exclusive NFTs tied to in-person concerts with its sponsorship of the Strength of a Woman festival in Atlanta and a specially designed digital token souvenir. Meanwhile, Pepsi and its sister brands have also begun to experiment with live virtual events on metaverse platforms. The next stage of experimentation will largely revolve around tying more virtual goods and experiences to real-world value and activations. That's something many brands have been thinking about as they seek to bring digital trends that gained purchase during the pandemic to a wider audience that has largely returned to life as normal. "We are certainly looking to build new experiences to meet the ever-changing landscape where our fans will be—both in the physical and digital spaces," Kaplan said. "The lines between physical and digital experiences have already been blurring for quite some time, and they will only become more intertwined in the coming years. The future consumer experience won’t be physical or digital—it will be 'phygital.' As the real and virtual experiences become so dependent on each other, they will eventually become one and the same, a true hybrid." Pepsi's work to build a presence in Web3—cryptocurrency-adjacent spaces that proponents bill as the next iteration of the internet—comes from a desire to meet consumers (especially younger ones) where they are already spending time, Kaplan said. Despite flagging overall sales, a recent survey from Seton Hall University found that around a quarter of American households purchased or sold cryptocurrency or NFTs. "It all starts with being consumer-centric. We always put our consumers’ interests at the forefront of our marketing, as we want to meet consumers where they are. So as people are starting to engage more in the Web3 space and continue to blur the lines between digital and physical experiences, we felt this was a natural place for Pepsi to play," said Kaplan, who will talk more about Pepsi's Web3 initiatives with Adweek's Jess Zafarris at Brandweek next Friday, Sept. 16. Pepsi's NFT releases have thus far been offered free of charge. Kaplan said the company is looking more for brand awareness than directly raising revenue. "I’d say in today’s state, [our efforts are] a combination of experimental and tangible," Kaplan said. "It is clear that these are areas where the world is heading, so it is key for brands to understand the opportunities and wrap their heads around how to best participate. However, as these spaces scale, they will only further solidify their impact and tangibility to the overall business beyond engagement." Kaplan wouldn't say much about what specific digital-physical projects Pepsi has in store for the next year or so, but the CMO's game plan is ever-changing, just like the space itself. "For me, the thing that’s been most surprising is how quickly the space is evolving," Kaplan said. "As such, it is critical that we keep our ear to the ground around the latest trends, platforms and consumer behaviors to build the most agile marketing plans as we move forward." Did Pepsi Make the Right Move Walking Away From the Super Bowl Halftime Show?

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Road to Brandweek: Pepsi Blurs the Lines Between Virtual and Physical Worlds

CMO Todd Kaplan has put the beverage giant at the forefront of Web3 exploration

Patrick Kulp

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Patrick Kulp