The New Challenge: Saving Pepsi From Decline

After its cola dropped to No. 3, PepsiCo is trying to win back soda drinkers; 'maybe we lost the focus'

- Laura Cooper

The job of rescuing Pepsi-Cola starts very early in the morning for Ram Krishnan. On a recent trip to San Antonio, the head of PepsiCo's U.S. beverage business was up before sunrise for a 5 a.m. meeting with the local sales team, followed by a roundtable discussion at 7 a.m. with managers.

At 8 a.m., they hit the streets. They split into four teams and started visiting stores—Walmart, Dollar General, Circle K, 7-Eleven and four others. They walked through the aisles with scorecards. Are the shelves full? Are the right PepsiCo drinks highlighted? What about the product mix? The shelf tags? The drink cooler at the checkout?

Since taking charge of PepsiCo's all-important U.S. beverage business in February 2024, Krishnan has been trying to fix a big problem. The U.S. market share for Pepsi's classic cola—which once aspired to overtake Coca-Cola's as the nation's favorite soda—had slipped to No. 3, behind Dr Pepper. And some of the company's other drinks, including Gatorade, had been steadily bleeding market share.

"Maybe we lost the focus," Krishnan said in an interview from Texas.

His campaign to claw back customers has kept him on the road almost nonstop, traipsing through stores, Monday through Thursday, week after week, all over the country. "When you're in the situation you're in and want to make some big transformative moves, I think it helps keep the pace and intensity up," he said.

Times are tough for legacy sodas, and they aren't likely to be helped by Health and Human Services Secretary Robert F. Kennedy Jr. referring to sugary, carbonated drinks as "poison." Energy drinks and niche beverages billed as healthier have been grabbing market share for years, and the U.S. soda market now resembles a slowly melting ice cube.