Pepsi takes the lead in evolving cola wars

Pepsi takes the lead in evolving cola wars

In the 1980s, the cola wars raged across every aspect of media. From magazine and TV ads to Billboards, sports star endorsements to product placement in everything from middle schools to motion pictures, you had to choose one or the other. There was no middle ground.

When just the top cola brands are placed head to head, Coke generally wins … and has held a consistent lead overall in recent years. But these two titans of industry have much more happening than just what comes in cans and bottles with the company logo on the side.

Pepsi and Coke are big business, and the market looks at much more than which one sells better. Overall, in recent years, Pepsi has been a better bet on Wall Street, outperforming the Coke brand, and that doesn’t seem likely to change. In fact, Pepsi is up 10 percent this year, while Coke stock is down two percent.

Market watchers say, if this trend continues, Pepsi could soon be worth more than Coke. It’s still got a ways to go, though. Coke’s market value is about $180 billion, giving it a $25 billion margin over Pepsi.

Much of the shifting trends threatening Coke’s longtime lead comes from consumer trends and health PR. People are drinking less soft drinks overall, wary of the health risks unlike in past decades where soda was a staple pretty much everywhere. That’s not to say they’re not selling. In recent years, Pepsi has tried, somewhat successfully, to bring in “real sugar” takes on their most popular brands – Pepsi Cola, Mountain Dew, and Dr. Pepper. And the company is experimenting with the return of Crystal Pepsi, an early 90s gimmick soda that flashed for a while but quickly disappeared. Will it catch on this time? Time will tell.

Meanwhile, consumer tastes overall are showing a shift away from high-sugar, high-caffeine beverages and a move toward healthier drinks. Sports drinks, fruit juices, and water are selling better than ever before. Both brands have a foot in that market too. Where Coke owns Minute Maid, Pepsi has Tropicana. Where Coke has Dasani, Pepsi has Aquafina. Both companies also own sports drinks – Powerade and Gatorade, respectively.

And this doesn’t even touch the food businesses each brand owns … but all of these businesses from bagged chips to fast food, are subject to changing consumer tastes as well. In the end, the company that best predicts and manages consumer PR and changing tastes will hold the lead when all the dust clears.

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