Pepsi, Now #3 Soft Drink, Launches ‘Social’ Vending Machines

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tdp2664 InvestorPlace In an attempt to "refresh" sales of its flagship soft drink Pepsi as well as Mountain Dew and other brands, PepsiCo Inc. (NYSE: PEP ) is turning to social vending machines to win back wandering consumers. The interactive touch screen vending machines encourage people to buy a drink for a friend or relative, while they are getting one for themselves. This particular social experiment won’t make or break the soft drink giant — but it’s not an overstatement to say Pepsi has a lot depending the program taking off. Although the company's 1Q11 sales increased 27 percent compared to a year ago with the help of other brands and acquisitions, we learned in March that sales of its flagship brand, Pepsi, fell during the quarter to the #3 spot behind The Coca Cola Company (NYSE: KO ) drinks Coke and Diet Coke. So how does the social soda scene work? Well, the machines feature a touch screen keyboard that lets buyers type in the recipient's name, mobile phone number and a personal message that includes a code to redeem the soft drink at the nearest Pepsi social vending machine. Or, if you prefer, you can send a video message with the code — recorded right there at the Pepsi machine. The machines even allow customers to view the beverage's nutritional information on demand. Most companies don't brag about being second to anyone or anything, but Pepsi had comfortably held the ranking in that soft drink category for decades and it had to be a blow, psychologically, to lose it. The social vending machines do have potential to help sales, particularly with mobile phone users obsessed with new apps and the like. Pepsi also stands to gain valuable personal information about buyers and their gift recipients that it can use to later market Pepsi products. The problem is Pepsi hasn't said how many machines it will use or where they will be located.  Co-workers who share a common vending machine area may be willing to send a soft drink as a gift, but people unfamiliar with Pepsi vending machine locations may hesitant. Likewise, gift recipients may become uninterested in redeeming their beverage if they have to drive around or make a special trip to find the social vending unit. Costs associated with making the machines widespread, also couldn't hurt margins. Then again, Pepsi could be on to something. Who would have guessed Coinstar (NASDAQ: CSTR ) subsidiary Red Box would be such a hit with its idea to rent DVD via a vending machine. The social vending move could be the next big thing for soft drink companies in the 21st century. As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.