- Todd Wasserman

Penny-pinching consumers took the fizz out of Pepsi's beverage business, but the company plans to funnel more money into marketing after announcing it will cut 3,300 jobs.

Pepsi today reported net third-quarter earnings of $1.6 billion versus $1.7 billion for the same period in 2007. In a statement, the company blamed the U.S. beverage business for the performance.

"We were adversely impacted by continued weakness in the U.S. liquid refreshment beverage category, which resulted in disappointing performance in our domestic beverage business," said PepsiCo chairman and CEO Indra Nooyi. The company did not outline how much more it would earmark for marketing, but said some of the estimated $1.2 billion it plans to save over the next three years will be applied to the marketing budget.

John Sicher, editor and publisher of Beverage Digest, Bedford Hills, N.Y., said Pepsi is not the only one suffering the effects of a weak economy. "The liquid refreshment business is down this year," he said. "It probably has more to do with the economy than anything else. Some consumption is going back to tap water."

But Sicher was optimistic about Pepsi's—and rival Coca-Cola's—fortunes over the next few months. "Both of the big beverage companies are really ramping up their marketing innovation for next year," Sicher said.

In particular, Beverage Digest reported on a Pepsi bottler meeting on Oct. 6-8 in which company executives unveiled a redesigned version of the company's globe icon and a "broad range of new products and packages."

According to the report, Pepsi hired Arnell Group, New York, to redesign many of the brand's packaging. For example, Mountain Dew, perhaps in a nod to texting lingo, will now be known as "Mtn Dew" on packaging.

Also up for 2009, according to the report: Pepsi Natural, with sugar, all-natural ingredients and glass bottle packaging; Diet Pepsi Max will be renamed Pepsi Max and will be positioned as "maximum taste"; a diet flavor line extension to "Mtn Dew"; a new Sierra Mist Ruby Splash flavor; and new products featuring the sweetener Stevia. New energy drinks are also on tap, per the report, including Amp carbonated teas and a line called Amp Energy Shots, among other planned launches.

The new focus on beverages also was evident in Pepsi's latest decision to reach beyond lead creative agency BBDO, New York, for new ideas for its flagship Pepsi brand. Sicher said Pepsi is making the right moves and "the business still has potential for growth."