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. Last Updated: 07/27/2016

Pepsi Launches Blue Logo From Mir

Invoking what executives called the "first billboard in space," U.S. soft drink giant Pepsi launched its new blue Russian marketing campaign Thursday by announcing plans to invest $550 million in the country over the next five years.

Cosmonauts floating in the Mir space station touted Pepsi while company officials in Moscow unveiled a blue Pepsi can with a Cyrillic logo as well as plans to increase manufacturing and distribution networks throughout the country for the company's beverages.

"This is the largest consumer product investment of any product in Russia," said Luis Suarez, president and chief executive officer of Pepsi's Latin America and European divisions. "Russia is a sleeping giant with a huge potential."

Suarez said the company and two U.S. partners -- Leucadia National Corp. and Whitman Corp.'s General Bottlers -- will spend $550 million in Russia over the next five years to build 11 new plants, 47 new warehouses and purchase 450 trucks, in addition to redesigning the company's cans, bottles and signboards.

Pepsi last month kicked off a global $500 million marketing campaign called "Project Blue" to claw back market share from rival Coca-Cola, which sells three times as many soft drinks outside the United States as Pepsi.

The first U.S. consumer product company to gain a foothold in Russia back in 1974, Pepsi has seen its former virtual monopoly of the Russian soft drink market erode steadily over the last five years: It now holds a 2-to-1 lead in cola sales, but the two companies are about even in overall soft drink trade.

Coca-Cola officials in Moscow said they do not plan to counter the Pepsi marketing campaign, but said the company has an investment plan of its own.

"We have competition every day and everywhere, and this is nothing new," spokeswoman Polly Howes said. "We don't manage our business by what other companies do."

Coke, which entered the market in 1986, has already announced plans to invest $500 million in production, bottling and distribution networks in Russia by the end of 1997, Howes added.

Neil Bainton, Pepsi's marketing director for Russia, said the company spent two years on devising its "Project Blue" campaign, which involved choosing among 3,000 possible new logos.

"We are only changing the look of the packaging, but the drink itself will remain the same," Bainton said.

Up in space, via a satellite linkup to the Radisson-Slavjanskaya Hotel, cosmonaut Yury Usachev delivered Pepsi's new slogan, "Pepsi, it's your time," as a banner behind him proclaimed, "Even in Space ... Pepsi is Changing the Script."

"This is the first billboard in space," said David Jones, president of the company's Eastern Europe and Central Asia divisions. He declined to specify how much Pepsi spent for the satellite hookup but said the company had a "six-figure" deal with Mir, Reuters reported.

Jones added that Pepsi is currently negotiating with the Mir space station to conduct joint projects, including a giant billboard in space and possible sponsorship of a team of astronauts to the moon.

Pepsi already has two bottling factories in Russia, where its sales totaled $240 million in 1995.

Pepsi and Leucadia will seek $200 million in loans from international banks such as the European Bank for Reconstruction and Development to finance new ventures in eastern Russia, Leucadia's Moscow representative Lawrence Hershfield said, according to Reuters.

Jones said that, based on income, Russians should drink about 150 cans of soft drinks a year, but the current figure is only 35.

"The reason why we are not selling up to our potential has to do with the distribution network," he said, adding the company expects the per capita consumption of soft drinks to increase to 300 servings in Russia by 2000.

Also at the press conference were former Soviet ambassador to Washington Anatoly Dobrynin and Donald Kendall, a Pepsi co-founder who brought it to the Soviet Union in 1974.

Kendall said Dobrynin was instrumental in first bringing Pepsi to the Soviet Union.