Case Study: The Pepsi Challenge

Every morning at 6 o’clock, Kevin Jacks is on the road, barreling his Pepsi truck down a series of old highways that connect the sleepy, northern Indiana towns of Bremen, Nappanee and South Bend along the southern shore of Lake Michigan. By 6:30, Jacks will have made the first of his day’s several dozen stops, mostly at mom-and-pop convenience stores and corner gas stations.

For 32 years, Jacks has been driving for PepsiAmericas Inc., PepsiCo Inc.’s second-largest bottler and distributor. For all that time, Jacks, 54, has done business the same way: His truck is loaded the night before, based on his best guess of what his customers might want to buy the next day. “I bring the store owners what I think they might need, and a lot of times the store manager says okay,” says Jacks.

On a good day, Jacks might sell close to 90 percent of the beverages he carries. But not all days are good. When Jacks guesses wrong, he hauls his unsold cargo back to the warehouse minus any bottles that inevitably broke in transit. It’s never too big of a deal, says Jacks. “If you’re a good salesman,” he says, “you can sometimes sell the excess down the road somewhere.”

But “sometimes” and “somewhere” aren’t good enough for Pepsi’s two biggest bottlers anymore. Under a sweeping new wireless strategy taking hold at PepsiAmericas and Pepsi’s largest bottler, Pepsi Bottling Group Inc. (PBG), Jacks and thousands of other drivers across the country are losing their responsibility for selling soft drinks. Under the bottlers’ new formula, the drivers’ job will be strictly delivery; they will hand over the sales job to brand new teams of PDA-toting sales professionals. The bottlers’ goal: Put the pop back into profits at a time when soda sales are going flat.