New Pepsi vending machines send friends drinks

Pepsi is debuting new vending machines that let you record video and send drink gifts to friends.

By Kim Peterson Apr 28, 2011 2:43PM
Credit: © Pepsi Co.
Caption: Pepsi's new Social Vending SystemPepsiCo (PEP) is making it easy to buy a friend a drink.

The company is introducing vending machines that let you buy a friend a soda in advance. Then it tells your friend that the drink is waiting.

The new machines from Pepsi are an experiment in combining social networking with traditional vending. The touch-screen machine will sell Mountain Dew and other beverages just like a regular vending machine. The difference is the way it includes your friends.

After buying a soda for a friend, a customer gives the machine the friend's name and cellphone number. Customers can even record a short video at the machine to send along with a personalized text message.

Friends receiving the text message get a code to enter into the vending machine for the free drink. Pepsi is showing a prototype of its "social vending system" at a trade show in Chicago this week.

Pepsi will even let people buy sodas for complete strangers. Say, for example, you want to buy a soda for someone at Butler University after the team's marvelous performance in the NCAA men's basketball tournament. Or you want to buy a drink for someone in a city hit by recent tornadoes. You could do that in what Pepsi is calling a "random act of refreshment."

The machine debuts as Pepsi products are getting more expensive. In the first quarter, PepsiCo hiked prices about 2 percentage points to help offset the rising costs of ingredients.

And the company isn't about to stop. It's going to see how many more price increases consumers will tolerate this year.

"We're trying to thread the needle and see how much pricing we can take," chief executive Indra Nooyi said in a conference call Thursday. But even those price increases probably won't be enough to counter the company's rising expenses for plastic (in its bottles) and corn (for its chips), The Wall Street Journal reported.

The company expects its commodity costs to rise to $18 billion this year, an increase of $1.4 billion to $1.6 billion. Pepsi will take a break from price increases in the spring, but look for some price hikes in the second half of the year.

Pepsi on Thursday reported first-quarter sales increase of 27% and a profit of $1.14 billion, or 71 cents a share. That's a drop of 20% from a year ago, mainly because the year-ago period had a large gain. After adjustment for that difference, Pepsi's profit was 74 cents a share -- exactly what analysts had expected.

Sales hit $11.94 billion, higher than the $11.84 billion analysts were looking for. Beverage sales were the star in the quarter, with volume up 12%, while snack sales volume rose 3%.

But rising costs for materials and energy, combined with a difficult economy, led Pepsi to issue a soft forecast for the year. The company said yearly profit would rise 7% to 8%, which would mean earnings of $4.42 to $4.46 a share, The Associated Press reports. Analysts expect $4.48 a share.

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