The Washington Post - 13.03.2020

a8 eZ re k the washington post.friday, march 13 , 2020

the levels that we would like to

see.”

Boasting higher caffeine than

most sodas, Mountain Dew was a

proto energy drink before the

category existed, Bryant said.

But it has pushed the envelope

with more-overt connections to

the energy-drink category re-

cently with mixed results.

“They’ve had Mtn Dew Game

Fuel, their video-gamer beverage

with more caffeine t han a regular

soft drink b ut l ess t han a n energy

drink but said to increase your

alertness,” Bryant said. “A nd they

have Mtn Dew Kickstart with

juice and caffeine. Then they had

Mtn Dew Amp, which basically

fizzled out entirely.”

In 2018, the brand spent

$119.5 million on paid media, up

from $89 million in 2017, accord-

ing to Kantar Media. Nearly

40 percent of its budget last year

was devoted to targeting gamers.

The energy drink category is

dominated by Red Bull and Mon-

ster, partly owned by Coca-Cola.

Hoping to bolster its position,

Coca-Cola launched Energy in

January, the first energy drink

under the Coca-Cola brand.

Mountain Dew was invented

in 1940 by Te nnessee beverage

bottlers Barney and Ally Hart-

man and has always been a

favorite of rural Americans i n the

heartland, Bryant said. He spec-

ulated that changing demo-

graphics might have something

to do w ith Mtn Dew’s disappoint-

ing sales.

According to the Pew Re-

search Center, a shrinking per-

centage of Americans live in

rural counties.

In a further effort to broaden

Mtn Dew’s appeal, Pepsi in Janu-

ary debuted Mtn Dew Zero Sug-

ar, sweetened with acesulfame

potassium, aspartame and su-

cralose.

The Rockstar transaction is

expected to close in the first half

of this year.

[email protected]

Tropicana.

Ye t Mtn Dew sales have disap-

pointed, with Laguarta recently

saying on an investor call, “Mtn

Dew is improving, but it’s not to

PepsiCo generated more than

$67 billion in net revenue in

2019, driven by a food and bever-

age portfolio that includes Frito-

Lay, Gatorade, Pepsi, Quaker and

“Juice and dairy milk have

been in sharp decline. Soda is

nearly flat,” he said. “Energy

drinks, water and nondairy

milks are the areas of growth.”

That is small compared with

the $ 30 billion-plus soda market,

but it is growing, whereas soda

had nominal growth, according

to Bryant.

BY LAURA REILEY

NASCAR’s Dale Earnhardt Jr.
loves i t (officially). T he American
heartland adored it so much
analysts called the middle swath
of the country the “Mountain
Dew Belt.” Citrusy and char-
treuse, it has a powerful caffeine
punch that makes it the original
undercover energy drink.
And yet, parent PepsiCo has
never been able to position
Mountain Dew, now branded as
Mtn Dew, effectively that way. So
Pepsi decided it was time to
bring in a Rockstar.
PepsiCo announced Wednes-
day it will pay $3.85 billion for
the Rockstar energy drink com-
pany. And even according to
Pepsi top brass, the reason the
company is giving Rockstar its
due is Dew.
“This highly strategic acquisi-
tion will enable us to leverage
PepsiCo’s capabilities to both
accelerate Rockstar’s perfor-
mance and unlock our ability to
expand in the category with
existing brands such as Moun-
tain Dew,” PepsiCo chief execu-
tive Ramon Laguarta said in a
statement. “Over time, we expect
to capture our fair share of this
fast-growing, highly profitable
category and create meaningful
new partnerships in the energy
space.”
Pepsi has had a close associa-
tion with Rockstar since 2009,
when it wrested a distribution
agreement away from the Coca-
Cola Co.
Both of these archrivals have
increasingly turned to energy
drinks and other “functional”
beverages over the past decade
as soda consumption in the Unit-
ed States has continued to flag.
Caleb Bryant, associate direc-
tor of food and drink reports for
market research company Mint-
el, said this acquisition gives
Pepsi a viable contender in the
energy drink market, which had
sales estimated at $12.4 billion in
2018.

Economy & Business

retail

Neiman Marcus to

close discount stores

Neiman Marcus is ditching the
off-price business and focusing on
its high-end customers.
The privately held luxury
retailer s aid it is closing m ore than
half of its remaining 22 Last C all
stores, which sold designer brands
at b ig discounts. The company
said Wednesday the moves, which
will result in 500 job cuts over the
next eight months, are designed to
free up resources to better focus
on high-end customers.
As p art of those efforts, the
Dallas-based company is
combining the online and store
teams and will shift the role of
sales associates to what it calls
trusted client advisers who will
help customers not just buy
products but help them w ith
dining options and other services
such as beauty and wardrobe
styling. Neiman Marcus will also
eliminate the jobs of 250 non-
selling a ssociates.
Geoffroy van Raemdonck,
Neiman Marcus Group’s c hief
executive, told the Associated

Press that 40 percent of the

company’s sales are coming from

customers who spend on average

$50,000 a year.

Van Raemdonck said b ringing

its stores online a nd equipping

them with the best leadership,

tools and support positions t he

retailer t o deliver o n its

commitment to “building l ong-

term, deep customer

relationships.”

The company also said it plans

to sell two Te xas distribution

centers.

Van Raemdonck declined to

comment on how business has

been affected by the coronavirus

outbreak, which has been

declared a pandemic.

— A ssociated P ress

energy i ndustry

Oil producers reduce

spending, drilling

Devon Energy, A pache and

Murphy Oil on Thursday became

the latest in a string of North

American oil producers t o slash

their capital s pending and drilling

plans as crude prices tumble.

Oil producers have been scaling

back spending since the last price

crash in 2014, and the latest cuts

come as the coronavirus outbreak

crimps demand and a price war

between top producers S audi

Arabia and Russia threatens to

flood the oil markets, pushing U.S.

crude to about $30 a barrel.

Apache on Thursday slashed its

dividend by about 90 percent, cut

its 2020 capital investment plan

by more than 37 percent, and said

it would stop producing in Te xas’s

Permian Basin and reduce drilling

activity in Egypt and the North

Sea off Britain.

Devon said it would c ut its

spending by about 3 0 percent

from its earlier forecast, while

Murphy Oil slashed its budget b y

35 percent at t he midpoint and

said it would delay some U.S. Gulf

of Mexico projects.

Crude fell about 6 percent to

$33.67 a barrel on Thursday

following surprise travel curbs

imposed b y President Trump in an

attempt to halt the spread of the

novel coronavirus and after the

United Arab Emirates followed

Saudi Arabia in promising t o raise

oil output to a record high in

April.

— Reuters

also in Business

The number of Americans filing

for unemployment benefits

unexpectedly f ell last week but

could rise in the coming weeks as

the coronavirus pandemic causes

companies to lay off workers amid

supply chain disruptions and

waning demand for some goods

and services. Other data on

Thursday showed producer p rices

dropping by the most in five years

in February, p ulled down by

declines in the costs of goods such

as gasoline and services.

United Parcel Service for the first

time in its 113-year history will be

led by a chief executive w ho did

not rise through the ranks of the

world’s b iggest p arcel delivery

firm. Former Home Depot chief

financial officer Carol Tomé, a

long-serving board member, takes

the helm June 1, replacing David

Abney. Tomé retired from the

home improvement retailer last

year. She will steer the Atlanta-

based company through a time of

significant industry challenges.

Dollar General beat quarterly

same-store sales and profit

expectations on Thursday, a s it

pulled in more bargain-hungry

shoppers to its stores but warned

of uncertainty facing its business

due to the coronavirus outbreak.

To c ompete with Dollar Tree, as

well as low-priced groceries a t

Walmart and Amazon, Dollar

General has added more higher-

margin non-consumable

products, such as home

decorations and party s upplies, to

its shelves to attract more

customers. Same-store sales rose

3.2 percent in the fourth quarter.

(Amazon f ounder and chief

executive Jeff B ezos owns The

Washington Post.)

— From news services

digest

afolabi sotunde/reuters

Workers stand on s caffolding at a construction site Tuesday a t

Nigeria’s Nnamdi Azikiwe International Airport, which is undergoing

an expansion that includes a new runway.

BY TONY ROMM

AND CRAIG TIMBERG

Facebook and Twitter have dis-
abled a sophisticated Russian-
linked operation designed to stoke
racial tensions among African
Americans in the United States,
the companies announced Thurs-
day, raising fresh alarms about
Kremlin interference ahead of the
2020 presidential e lection.
The malicious campaign relied
on a mix of fake accounts and real
people, who lived in Ghana and
Nigeria, some of whom appear to
have been duped into thinking
they were aiding a nongovern-
mental organization. Instead,
they helped amplify a network of
inauthentic accounts, pages and
groups on Facebook and Twitter
that shared polarizing content re-
lated to social issues including
race and civil rights, the tech gi-

ants said.

None of the so-called coordinat-

ed, i nauthentic activity focused on

the 2020 election or sought to

“promote or denigrate political

candidates,” said Nathaniel Glei -

cher, the head of security policy at

Facebook. B ut Facebook and Twit-

ter l inked the operation to some of

the same Russian actors that em-

ployed similar tactics four years

ago to spread falsehoods during

the 2 016 presidential r ace.

The takedowns Thursday are

likely to rattle Washington at a

moment when U.S. intelligence

leaders once again are sounding

the alarms about suspected Rus-

sian interference. This week, a se-

nior Trump administration offi-

cial told Congress that Russia’s

online efforts did not explicitly

seek to benefit a particular candi-

date. In earlier briefings, intelli-

gence l eaders told l awmakers t hat

Russia’s online efforts had “devel-

oped a preference” f or President

Trump.

Four years ago, so-called Rus-

sian trolls seeded posts, photos

and videos on major social-net-

working s ites i n support of Trump,

and in opposition to then-Demo-

cratic candidate Hillary Clinton.

Many of those Facebook posts,

tweets and YouTube videos also

sought to stoke social and political

discord, including by trying to dis-

courage black and Latino users

from voting in the first place.

In response, tech giants includ-

ing Facebook and Twitter raced to

bolster their digital defenses, hir-

ing more workers to review con-

tent and investing m ore heavily in

artificial intelligence that could

spot coordinated fake accounts.

But Russia’s tactics also have

evolved, reflecting a better under-

standing of American politics and

a heightened a bility t o take advan-

tage of social m edia sites t o spread

falsehoods at s cale.

In O ctober, Facebook said i t had

removed a network of Russian-

backed accounts that had p osed as

locals to weigh in on political is-

sues in s wing states, at t imes prais-

ing Trump and attacking former

vice president Joe Biden. The dis-

information operation — discov-

ered in its early stages — also

sought to sow divisions among a

then-packed Democratic primary

field.

On Thursday, Facebook and

Twitter leaders said they c ould not

speculate on whether the Russian-

linked network they removed

might have eventually pivoted

into politics. “We know we caught

this early enough on that these

accounts were broadly unsuccess-

ful in obtaining a large scale audi-

ence,” s aid Yoel Roth, the head of

site integrity at Twitter.

The campaign disabled Thurs-

day spanned 49 accounts and 69

pages on Facebook, with another

85 accounts on Instagram. More

than 13,000 users followed one or

more of the pages, and 265,

followed one or more of the since-

suspended accounts on Insta-

gram. Twitter, meanwhile, said it

discovered 71 accounts associated

with the o peration o n its platform.

In a n unusual turn, though, m a-

licious Russian-linked actors es-

sentially helped set up a nongov-

ernmental organization, called

EBLA, based in Ghana. Gleicher

said Russia’s approach aimed to

make it “harder for us to find

them.”

Much of the operation’s efforts

appear to have been directed at

U.S. social media users, the tech

giants said. At one point, the

group t ried t o hire a staff p erson in

Charleston, S.C., but didn’t suc-

ceed, said Darren Linvill, a com-

munications professor at C lemson

University, who initially found

some of the suspect Twitter ac-

counts.

An archived version of one of

the closed Facebook pages, EBLA,

shows that it was created Oct. 1

and posted on a range of issues

apparently targeting African

Americans, including on the sub-

jects of racial violence. The con-

tact information showed a phone

number in Ghana. The page is no

longer available.

A post from Feb. 5 read, “There

is always a justification for the

violence a white man committed

on a black man. This is because

our history was thwarted the very

first day we refused to put down

the history by ourselves. You can-

not tell someone to write your

history when that person is guilty

of those crimes and yet expect

them to write them to suit you.

#blackcommunity #martinlu-

therking #socialissues #BlackHis-

toryMonth #BlackLove.”

Several researchers studied the

disinformation campaign along

with the tech companies. They

noted the sophistication of the

operations, which resembled pre-

vious efforts in themes but relied

on new techniques for delivering

them.

“Information operations’ in-

creasingly creative use of proxies,

including of real groups and orga-

nizations wittingly or unwittingly

participating in these campaigns,

is a clear and problematic trend,

we’ve observed over the last few

months,” added Camille Francois,

chief innovation officer for

Graphika, a network a nalysis firm

that studies disinformation.

The firm issued its own report

Thursday on the Ghana-based

campaign, called “IRA in Ghana:

Double Deceit,” that details the

similarities and differences with

efforts by Russia’s Internet Re-

search Agency during and after

the 2 016 presidential election.

B oth Linvill’s work and the re-

port by Graphika highlighted an

apparent tactical shift. The Gha-

naian accounts were tied to real

people and a real organization,

rather than being fake accounts.

[email protected]

[email protected]

Facebook, Twitter disable Russian-linked social media operation

Operation aimed to stoke

racial tensions among

African Americans

Mountain Dew’s caffeine high crashed.

Now PepsiCo is taking another shot.

luke sharrett/bloomberg neWs

PepstCo hopes its acquisition of the Rockstar energy drink company will help it better position its high-caffeine Mtn Dew brand.

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