“Behind black doors, what used to be a trendy restaurant in New York had been stripped to its concrete bones. Wires and cables snaked along the floor. Ceiling lights twinkled in the gloom.
There was no sign of the brand behind the renovation: Pepsi.
Known for its beverages, Pepsi is now moving into the restaurant business. The 5,000-square-foot space — on the same block as Milk Studios in Chelsea (Pepsi insists it resides in the ultrahip meatpacking district) — will become Kola House, a restaurant-bar-event space that the company hopes will be both social hub and testing ground for new products.
“This isn’t a pop-up,” said Seth Kaufman, PepsiCo’s chief marketing officer for beverages in North America. “This is something much bigger than that.”
Mr. Kaufman said he wanted Kola House to offer visitors “a premium experience,” and to that end, it will not be plastered with the Pepsi logo or filled with Pepsi products. Everything at Kola House will be centered on the kola nut, a bitter fruit that contains caffeine and gives cola beverages their name. Essentially, Pepsi is trying to market its product without marketing its product.
Mr. Kaufman’s ambitions may seem outsize for a space still under construction. But his vision reflects how brands are trying to connect with consumers in ways beyond TV commercials and online ads.
Kola House is designed for the social media age. However grandiose, Pepsi’s goal is that visitors — particularly influential ones — will talk about Kola House on Facebook and Twitter and post pictures on Instagram.
PepsiCo, the parent company of the Pepsi brand, reported that its sales dropped 5 percent in the third quarter, to $16.3 billion, though it said its North American beverage business was performing well. Still, Americans are turning away from sugary sodas and drinks, and brands like Pepsi are trying to come up with new ways to bolster their image and attract consumers.
“People consume content with a speed that we’ve never experienced before,” said Mauro Porcini, head of design for PepsiCo. “That’s why, to be relevant online in these conversations, these companies need to activate offline in the best possible way.”
With Kola House, Pepsi is following in the footsteps of other consumer brands that have opened upscale spaces in fashionable neighborhoods. The yogurt company Chobani, for example, opened a flagship cafe in SoHo in 2012, where customers can snack on sweet and savory yogurt combinations. In 2015, Nike opened a showroom and fitness studio, also in SoHo, called 45 Grand. And of course, Apple is perhaps the king of turning stores around the world into sleek spaces where consumers go to hang out, not just buy products.
Consumer companies that set up shop in hip areas are trying to seem more on the edge and exclusive, said Allen Adamson, a branding expert and the former chairman for North America at Landor Associates, a global brand company.
The danger for a big, mainstream brand like Pepsi, however, is that it will look more like a dad at a high school party than a member of the cool kids club.
“They could be in the right place, but just because they’re hanging out with the right brands doesn’t mean they’re going to attract the right buzz,” Mr. Adamson said. “While they can buy Super Bowl spots, they can’t buy edge, they can’t buy panache, they can’t buy sizzle.”
Pepsi is still working out the final details of Kola House. It has not yet named an executive chef, and the menu is undecided. The company is aiming for a spring opening, but it does not have a firm date. There are no plans at the moment to open permanent Kola Houses in other cities. (There are, however, plans to have temporary Kola Houses at big events like Lollapalooza.)
“This will continue to be something we learn from,” he said. “A year after it launches, there will be components of it that look different than when it launched because that’s what marketers need to do these days.”
Since Pepsi is new to the hospitality business, it has teamed up with Lenny Kravitz’s design firm, Kravitz Design, and The Metric, the group behind Gilded Lily, a club below the Kola House space. Alex Ott, a well-known bartender (“We call him ‘alchemist,’ not ‘mixologist.’ Don’t call Alex a mixologist,” Mr. Porcini said), will create the cocktails.
Pepsi declined to say how much Kola House would cost to operate or for how long the company had rented the space. But Mr. Kaufman said it was a “significant undertaking” that was being run by the marketing department.
Pepsi is expected to introduce the Kola House concept in San Francisco in the days leading up to Super Bowl 50. Pepsi will also sponsor the Super Bowl halftime show and run a television commercial during the game that will focus on music and well-known songs.
Before the game, Pepsi will set up what it is calling a modular Kola House (“rather than a pop-up,” Mr. Kaufman said). There it plans to serve kola sliders, made with wagyu beef and caramelized onions, and beef tartare with caviar and kola truffle aioli. On the beverage menu is a drink called East Meets West, a pearlescent, vodka-based cocktail with kola bitters.
The permanent Kola House in New York will include space for live entertainment.
Mr. Kaufman and Mr. Porcini both emphasized that the Pepsi branding would be subtle — a logo here or there, but nothing too obvious.
“Consumers will love your brand because your brand enables you to have the experience, but they don’t want to have the brand in their face,” Mr. Porcini said. “It needs to be very subtle, elegant, sophisticated.”
To that end, he said, there will be a small Pepsi logo on the sculpturelike bar fixture, but there will not be bottles of Pepsi and bags of Fritos lying around.
“We are in a time where we have to transform how we connect with and engage consumers,” Mr. Kaufman said. “If brands don’t do that today, they will be irrelevant tomorrow, whatever tomorrow is.””
Written by Sydney Ember via cnbc