The Cola Wars. A quick overlook!

Early beginnings of the Cola Wars

The rivalry between Coca-Cola and Pepsi is legendary. Although the?feud heated up with?the Pepsi Challenge?in 1975 —which?prompted Coca-Cola's?horrific New Coke debacle?— the brands have been fighting each other for over a century.?

The saga began in 1886 when John S. Pemberton developed the original recipe for Coke. Here's what was in it:

Pepsi-Cola was created in 13 years later by pharmacist Caleb Bradham

Key Developments

1. Early Years (1886-1940s): Coca-Cola was created in 1886 by John Pemberton, and it quickly gained popularity. In 1892 Asa Candler purchased and incorporated Coca-Cola. Pepsi-Cola was founded in 1893 by Caleb Bradham but struggled to gain traction. In 1900 musician Hilda Clark becomes the first celebrity to endorse Coke. In 1904 annual sales of Coke exceeded 1 million gallons. In 1906 Coke bottling operations begin in Canada, Cuba, and Panama. D'Arcy Advertising Company began its 50-year association with the Coca-Cola Company. Coke begins using athletes in advertising, starting with noted baseball players. In 1912 Coke bottling operations are started in the Phillipines. Then in 1915 Coke designed the contour bottle. Asa Candler retires from the Company to become mayor of Atlanta. In 1919 Coke bottling plants are opened in France (Paris and Bordeaux). The Coca-Cola Company is purchased by a group of investors led by Ernest Woodruff for USD 25 Million. In 1923 Robert W. Woodruff is elected President of Coke, where he remained for more than 60 years. That same year Pepsi went officially bankrupt due to WWI sugar rationing. Coca-Cola dominated the market, and Pepsi-Cola focused on niche markets and regional distribution. In 1928 the Pepsi-Cola trademark was sold to Craven Holdings Corp. and the headquarters moved to Virginia. Then in 1931, Pepsi went bankrupt for a second time. In 1931 Charles G. Guth, president of Loft Inc. (chain of candy stores) drops Coke and buys Pepsi-Cola. In 1933 Pepsi doubled up, selling 12oz bottles for 5 cents. Walter S. Mack was hired as the president of Pepsi-Cola. In 1938 Coke entered Australia, Austria, Norway, and South Africa. In 1939 Pepsi launched the first-ever advertisement jingle named "Nickel Nickel" (renamed to "Pepsi-Cola hits the Spot") shipping over 1 million copies to jukeboxes. In 1940, at the start of WWII Mack purchased a sugar plantation in the island of Cuba to avoid war-time sugar rationing issues.
2. Post-War Era (1940s-1960s): In 1941 Pepsi adopted a new red, white, and blue logo in support of American troops in WWII. In 1945 Pepsi started selling Pepsi in cans. "Coke" becomes a registered trademark of The Coca-Cola Company. Then in 1946, the first price increase from 5 cents ended the decades of old "nickel Coke". After World War II, Coca-Cola expanded globally, while Pepsi-Cola focused on regional markets. Pepsi-Cola introduced its iconic slogan "The Pepsi-Cola Hits the Spot" in the 1950s, which helped it gain popularity. The first TV commercial for Coke was broadcast on Thanksgiving Day on a CBS half-hour special. Credit is given to Pepsi Co. president Al Steele's wife (film star Joan Crawford) for changing the direction of Pepsi′s marketing from value to lifestyle. In 1953 "Coke Time" debuted on both radio and television, it's so popular they issued promotional records of the songs. In 1956 McCann Erickson, Inc. replaced the D'Arcy (1906) as Coke's official advertising agency. In 1959 Pepsi launched the "Swirl" bottle and the ad campaign "Be Sociable, Have a Pepsi". Pepsi was now available in 120 countries. In 1959 Coke was distributed by a network of 1,700 bottlers, operating in more than 100 countries. Pictures of Vice President Richard M. Nixon and Soviet Premier Khrushchev sipping Pepsi at the Pepsi kiosk in Moscow make global headlines. Pepsi launched its first ad campaign to focus on the youth, dubbed "Sociables", followed by "Now it's Pepsi, for Those Who Think Young". Coke acquired the Minute Maid Corporation. In 1961 is the first appearance of Coke in the feature film "One, Two, Three". Pepsi launched the campaign "Come Alive! You're in the Pepsi Generation". Then in 1962, Coke went public at USD 101 a share. TaB, the first diet rink is launched. "Things Go Better With Coke" advertising campaign begins. In 1964 Diet Pepsi is launched. The jingle for the ad campaign "Girlwatchers" became so popular it hit the Top 40 charts as a popular record. Pepsi buys Mountain Dew from Tip Corp, launching with the slogan, "Yah-Hoo, Mountain Dew". In the mi-60s Pepsi merged with Frito Lay to create PepsiCo, setting the stage for the war today. Diet drinks popped up too, creating a whole new soda segment. In 1966 Pepsi opens its first operations in Eastern Europe and Japan. And in 1969 new packaging for Pepsi, a bold red white, and blue with the slogan "You've got a lot to live, Pepsi's got a lot to give". Mountain Dew changes its slogan to "Get That Barefoot Feeling Drinking Mountain Dew".
3. Cola Wars (1970s-1990s): The Cola Wars intensified in the 1970s and 1980s as both companies invested heavily in advertising and marketing. Pepsi-Cola launched its "Pepsi Challenge" campaign in the 1970s, encouraging consumers to taste-test Pepsi against Coca-Cola. This campaign helped Pepsi gain ground, but Coca-Cola maintained its market lead.
4. New Millennium (2000s-2010s): The Cola Wars continued, with both companies focusing on global expansion and diversification. Coca-Cola acquired Minute Maid and Fanta, while PepsiCo acquired Quaker Oats and Gatorade. The rise of health-conscious consumers and the growing demand for low-calorie and low-sugar beverages led both companies to introduce new products like Diet Coke and Pepsi Zero.
5. Modern Era (2020s): The Cola Wars have evolved into a portfolio game, with both companies focusing on expanding their product lines and diversifying their offerings. Coca-Cola has acquired Costa Coffee and invested in the cannabis industry, while PepsiCo has acquired SodaStream and e-commerce. The rise of e-commerce and digital marketing has also changed how companies engage with consumers.

Modern Challenges and Strategies

• Health Concerns: Both companies face increasing scrutiny over the health impacts of sugary drinks, leading to diversification into healthier options and marketing strategies.
• Sustainability: Emphasis on environmental sustainability and corporate responsibility is shaping both companies' strategies.
• Digital Transformation: Leveraging digital platforms for marketing and sales has become crucial in reaching younger demographics.

Recent Developments

• Innovation: Both companies continue to innovate with new products, flavors, and packaging to stay relevant.
• E-Commerce: Increasing focus on e-commerce and direct-to-consumer channels.
• Strategic Partnerships: Forming strategic partnerships with restaurants, retailers, and other beverage companies to strengthen market position.

Today's Market Capitalization

• The Coca-Cola Company: As of today, the total market capitalization is USD $275 billion
• PepsiCo: as of today, the total market capitalization is USD $228 billion

Conclusion

The competition between Coca-Cola and PepsiCo has evolved from a product-based rivalry to encompass marketing prowess, global expansion, and adaptation to changing consumer preferences and societal expectations. While both companies continue to vie for market leadership, their strategies now include sustainability, health consciousness, and digital innovation to secure their positions in the global beverage industry.