Pepsi to Revamp Refresh Project in Light of Complaints

PepsiCo is revamping its $20 million online charitable giving contest, which has been dogged by complaints of vote-rigging, the Wall Street Journal reports.

Launched during last year's Super Bowl, the Pepsi Refresh Project awarded more than $20 million in grants — ranging from $5,000 to $250,000 — to four hundred nonprofits and social causes. According to the company, the contest for the most part went smoothly. At times, however, the competition grew heated, with community organizers, health interest groups, and religious organizations forming informal alliances in order to dominate the voting. In response, Pepsi plans to eliminate the $250,000 grant category — the main draw for larger organizations and alliances.

In addition, Pepsi will reduce from ten to five the number of causes for which people can vote each day and, starting in May, will award nearly twice as many grants of $50,000 or less; eliminate the environment and health categories, which attracted health advocacy groups who were behind many of the alliances and, according to the company, didn't always reflect the lighthearted nature of its brand; and implement a lottery system to select the charities that compete each month, scrapping the current system, which rewards savvy applicants who submit ideas within seconds of registration.

According to Jill Beraud, chief marketing officer for PepsiCo Americas Beverages, the changes should make the second year of the competition more democratic. They're also aimed at boosting the company's sales, which have declined over the past decade and dropped nearly 10 percent in the first nine months of 2010. To that end, Pepsi plans to promote the contest on Pepsi bottles and cans, including promotions on bottle caps that offer up to a hundred votes.

While the initiative may not have helped to boost the company's beverage sales, it did exceed its goals for engaging consumers, with more than 76 million votes cast through Facebook and an unknown but significant number of updates sent via Twitter. "This was not a corporate philanthropy effort," Shiv Singh, head of digital for PepsiCo Americas Beverages, told the New York Times. "This was using brand dollars with the belief that when you use these brand dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community will win. That was a big bet. No one has done it on this scale before."

Jennifer Preston. "Pepsi Bets on Local Grants, Not the Super Bowl." New York Times 01/30/2011. Valerie Bauerlein. "Pepsi Hits 'Refresh' on Donor Project." Wall Street Journal 01/30/2011.