As always the case with the run-in towards Watches and Wonders, every year, the watch-collecting community comes together to try and make predictions as to what new watches will be released and, just as importantly, what familiar faces will be discontinued. As with every year, this year has seen some intense speculation surrounding the discontinuation of one watch in particular: the Rolex Day-Date… April Fool’s! The Rolex GMT-Master II ref. 126710BLRO, known in the watch world as the “Pepsi.” With Watches and Wonders 2024 just around the corner, let’s examine this prediction, see if it has any merit, and look at how it has impacted the market so far.
The Rumor
Simply put, the word on the street is that Rolex are having production difficulties with their iconic blue and red “Pepsi” bezels. First made in a green ceramic powder that is then turned completely red through several different firing and dyeing stages, the northern half of the fully red bezel is then topped with a proprietary chemical mixture that turns it blue during a chemical reaction that occurs when the bezel is fired one last time.
As it turns out, the border where the blue and red colors meet is where the issue gets a little tricky, with the blue color bleeding over into the red half so often that it has resulted in a 90% failure rate (a figure I’ve personally been told by two different ADs). As a result, Rolex has significantly reduced the number of Pepsis they ship to their retailers over the last six to twelve months, resulting in a massive supply restriction on the secondary market and fueling this rumor of a possible discontinuation.
The Effect of the Rumor
Offered in the GMT-Master and GMT-Master II collection since its inception back in 1954, with one exception between 2008 and 2013 when no Pepsi-bezel timepieces were produced, the GMT-Master collections have almost always had a Pepsi among their ranks, so a discontinuation would undoubtedly hit the market and watch-collecting community hard. Not only is it a truly iconic member of the two GMT-Master collections, it is arguably one of the first Rolex models that anyone pictures when they think of a Rolex. A discontinuation of this magnitude would have significant ramifications for the watch market. I can only imagine the uproar it would cause on social media, too.
With the secondary market’s recent pricing decline, levels of speculative watch investing have taken a notable downturn across several brands. However, the impact of this rumor has had a profound effect on the market for the Rolex Pepsi, which is bucking this downward trend in terms of sales volume and market value appreciation. In fact, ceramic-bezel Pepsi models are being snapped up across the board, with a significant emphasis on newer, full-set offerings. This is particularly notable in the EU market, where the number of Pepsi models available for sale dropped by 35% between December 23, 2023, and February 24, 2024, with other markets like the US and Asia beginning to follow suit. This in turn translated into a 5% increase in the market value of the Pepsi as a variant, and a 10% increase in the market value of offers from 2023, as well as the very few from 2024 that will make it to market.
Possible Outcomes
Depending on how this rumor plays out, there are only a couple of possible outcomes for the Rolex Pepsi. Either it gets discontinued, and gains noticeable market value overnight as people swarm to add an iconic member of a dying breed to their collection, or it stays in production as far as Rolex are concerned (or are willing to signal publicly), with its market value seeing a decline due to the fact that supply is still going to be working its way onto the market.
However, it’s worth bearing in mind that even if the Pepsi does remain in production, its supply will not suddenly jump, nor will its price take a sudden nosedive. The supply would likely remain at the current all-time low volume that it currently stands at, relative to years gone by. The only way in which this supply crunch could be alleviated would be for Rolex to announce a new type of blue and red Pepsi bezel in tandem with the discontinuation of the ref. 126710BLRO, which is pretty unlikely, all things considered.
Conclusion
While no one has a crystal ball or can predict the future, I think it’s hard to see a world where the Pepsi sheds a large amount of its market value, no matter its fate. Not only is it useful in day-to-day life as a sports watch with a date and GMT function, it’s also a stylistic icon that has come to symbolize everything Rolex stands for among watch collectors and the lay public alike.
However, with that said, what do I think will happen? I believe there is no smoke without fire, and the Rolex Pepsi will probably be officially discontinued. Then, I think Rolex will seek to solve the bezel’s color bleeding issue, and launch a new variant in a few years with a bezel that doesn’t require ten attempts to manufacture one successful bezel, something quite unbelievable. Alternatively, Rolex might also choose to reduce the Pepsi’s supply to nearly nothing while they try to solve the bezel problem and maintain some small level of supply to maintain appearances. After all, Rolex might not want their competitors to know about their production problems.
In any case, be sure to revisit Chrono24 Magazine during our coverage of Watches and Wonders 2024, and keep up to date with the latest releases and discontinuations as they are announced. We promise to tell you about the Rolex Pepsi the very second we find out what, if anything, is happening.
