Richard Branson, the flamboyant British entrepreneur who made millions splashing the name "Virgin" over everything from an airline to vodka, plans to challenge soft drink giants Coke and Pepsi soon on their home turf with Virgin Cola.
Branson said he's "not worried" about how American women will respond. "If people want to take it too seriously, they can take it too seriously."
But Virgin officials claim the Pammy will win favor because it is really rather convenient. "It is a very practical shape; it's comfortable to hold," especially for drivers, said James Kydd, marketing director of the Virgin Trading Co., one of Branson's many business divisions and the one that owns the international cola business.
Still, there's a nagging little problem of making sure the bottle will fit in American beverage dispensers. The Pammy, now sold in Europe, has to be reconfigured to American beverage sizes and that's not an easy job. "We have to make sure the sides don't blow out," Kydd said.
That may be the least of Virgin's worries. Introduced only three years ago in Britain, Virgin Cola has made only a slight dent against Coke and Pepsi, accounting for less than 1 percent of all soft drink sales there, according to Beverage Digest.
And competition promises to be even fiercer in the United States, where Branson has talked about launching his cola for more than two years.
"The U.S. marketplace will be extremely competitive -- more difficult than he had in England," said Michael C. Bellas, chairman of Beverage Marketing Corp.
"The cola business in the United States is dominated by two of the best marketers in the world, Coke and Pepsi, which also have two of the best distribution systems in the world," added John Sicher, editor and publisher of Beverage Digest. "The challenges that Royal Crown and private label cola have faced illustrate that selling a successful cola in the U.S. is extremely difficult if you're not Coke or Pepsi."
Beverage Digest figures show sales of carbonated soft drinks totaling $54 billion in the United States last year, with Coke accounting for 44 percent of the market and Pepsi 31 percent. "Getting a tiny piece of that business would be a nice business, but it will be a huge challenge, because Coke and Pepsi will not let anybody else in without a huge fight," Sicher added.
If Virgin Cola arrives in the United States, it will almost certainly introduce a great degree of whimsy into the highly competitive soft drink market.
For whatever container it is sold in, Branson has promised to make a bold splash with a "fun TV {ad} campaign." He's already done that in Europe, where's he gradually has expanded sales of Virgin Cola. Poking fun at foreign cultures, one TV ad features two naked Swedish men running to a sauna to stoke the coals with a Pammy. In an Italian ad, a nun pinches a man's bottom as he buys a can of Virgin Cola from a vending machine.
As Branson said, "there's no point" to doing business if you aren't "having fun doing it. . . . We hope to give Coke and Pepsi a run for the money. They are near monopolies. The upside's fantastic if you can pull it off."
Branson said he decided to start selling cola after "somebody came to me with a formula. We thought it tasted good. I took it to my kids' school and we had a blind taste test of the three {colas} and it came out well ahead of Coke and Pepsi."
The idea of the Pammy came after Pamela Anderson had dinner with Branson and his wife. At dinner, the three talked about the Pammy and the next day, Branson said, he received a note from Anderson giving him permission to use her name for no fee.
Anderson's publicist, Ann Israel, said that although she knows about the Pammy bottle in Europe, this week was "the first time" she heard about plans for a similar one here.
The Pammy bottle is already causing concern at the National Organization for Women. "I think the idea of using Virgin as a corporate logo was offensive to begin with and the Pammy soda really just plays on schoolboys' fantasies," said Elizabeth Toledo, NOW's vice president of action. "It seems juvenile but not unexpected from the Virgin companies."
Branson has been selling Virgin Cola in Britain since November 1994; Kydd said sales today account for about 4 percent of the take-home market.
But Sicher noted that the take-home market is only a small segment of the British soft drink market. When sales at soda fountains and vending machines are included, Virgin accounted for only 0.8 percent of all soft drink sales in 1996 (the latest figures available), down slightly from Virgin's 1995 market share of 0.9 percent. Sicher also said Virgin is not one of the top 10 brands of soft drinks sold in England.
In the past few months, Virgin has expanded its operations in France, Belgium and South Africa.
Two years ago, Virgin conducted a small test in the United States, selling its drink in 200 stores in the Philadelphia area. "It was a very narrow, quick and dirty consumer test, just to see if Americans wanted another cola or were bored senseless with the whole thing," said Alexis Dormandy, executive vice president of Virgin Cola Co. USA. The results have been kept very private. A marketing expert like Sicher, who usually knows the results of such tests, said he "never saw numbers from it." But Dormandy said the results "blew our minds. We had 7 percent of the market."
So now, Virgin is getting ready to introduce Virgin on a broader scale in several cities on both coasts, said Dormandy. But Dormandy, Kydd and Branson all declined to say exactly where -- or when.
"We know that wherever we launch," Coke and Pepsi will offer retailers stiff discounts, Branson said.
For now, Coke and Pepsi officials profess to be unconcerned. "We don't manage our business by looking in the rear-view mirror," said Coca-Cola Co. spokesman Bill Hensel.
"Although this is the land of opportunity," PepsiCo Inc. spokesman John Harris quipped, "the U.S. soft drink industry is not virgin' territory." The Cola Wars Virgin Cola, whose sales barely register in Britain . . . Share of British cola market Coca-Cola -- 33.6% Pepsi -- 12% Virgin -- 0.8% . . . is facing a market in which the top two powerhouses have far more dominance. Coke and Pepsi combined market share U.S. -- 75% Britain -- 46% NOTE: Virgin Cola was introduced in Britain in 1994; Britain market figures are for 1996, the latest available; U.S. figures are for 1997. SOURCE: Beverage Digest CAPTION: Pamela Anderson of "Baywatch."
