Coke vs Pepsi: Modern Day Cola Wars

Thanks to the pandemic, soda consumption is back up. So are we headed for another war between the two mainstay cola brands or is it clear that one brand rules the (modern) day?

What were the original cola wars?

Back in the 1980’s, there was an epic battle of two brands: Coke and Pepsi. Both brands clambered for market share (Little 2019). Here’s what went down:

• Pepsi won a bunch of blind taste tests.
• They famously shared the results in the Pepsi Challenge campaign.
• For a short time, Pepsi beat Coke in sales.
• Coke countered with “New Coke”, but quickly back-peddled as they faced angry Americans who loved the original product.

If you are old enough to recall that period of time, which brand did you choose? Were you a Classic Coke fan, or a Pepsi lover? And do you think your tastes have changed?

Coke vs. Pepsi: Who is Number One?

According to our research, odds are you are holding a can of Coke in your hands. We talked to 200 consumers leaving Target, Walmart, Walgreens, and CVS and 51% choose Coke, while 23% would rather drink Pepsi.

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So how did Coke take over where Pepsi left off years ago? And what can Pepsi do to regain traction? Here are some facts to consider:

Fact #1: Because of the pandemic, soda use is up

For 14 years, soda dropped every year in use. (Holodny 2016) COVID-19 changed that. So, why were consumers drinking soda again? Well, it turns out when people are stuck at home, old habits return. (Staff 2020a)

We found that 84% are drinking more—or the same, amount of soda since the pandemic started. Not only that, they’re planning their purchases ahead of time. While energy drinks are an impulse purchase—convenience stores leading in sales—that’s just not the case with soda. 😉

Most (78%) buy their favorite soda at grocery stores and 74% at big-box retailers. This indicates a more planned purchase. So, why are sales up?

Simple. Drinks with high sugar content are perceived as an indulgence. (Staff writer 2020b) And, we already know that consumers are welcoming a little more luxury in their lives, right now. So, it makes sense that they’d reach for a comforting can of Coke, to cool down the stress of COVID-19.

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Fact #2: Coke is more popular than Pepsi

Caffeine  and taste put Coke on top. Or at least the perception of a caffeine punch. A primary reason you love that brown, bubbly beverage is the buzz it brings. And 77% say Coke gives them a bigger caffeine boost. Ironic, actually, because Pepsi has more caffeine in it. (Schwartz 2020) But hey, that’s the power of perception. Score 1 to Coke.

Taste is why Pepsi beat Coke back in the original Cola Wars.

Taste is a close second. At 71%, Coke is the clear winner of the tastebud category. That’s 2 for Coke. But, here’s the truth. A full 50% say Coke is sweeter — they’re wrong. Pepsi is. (Schwartz 2020) In the Cola Wars, Pepsi outperformed Coke over and over again (Little 2019) — with more sugar and a sweeter sip. Yet in 2021, we end up with Coke: 3, Pepsi: 0

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Fact #3: Coke has more memorable commercials

Picture this: It’s the end of a busy day. You’re at home, about to turn on the TV. And, if you’re like 89% of people, now is the time you’ll reach for a Coke or Pepsi. With an overwhelming majority preferring to enjoy their favorite drink at home, it’s no surprise that Cola is a lifestyle product.

So, what? Well, that’s important for at-home advertising, which is the dominant marketing strategy here. We asked, and TV is where 76% remember seeing Coke and Pepsi ads. This also aligns with their ability to remember the ads, with 71% saying Coke has memorable commercials.

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Now, put Americans at-home more because of a pandemic—and it’s easy to see why Cola use is up.

If you’re in the retail or soda business, here’s your chance to advertise. You’ve got a more captive audience than ever before, and they’re clearly increasing consumption—of TV and of soda. It’s a match made in heaven for marketers. This is the time to increase your ads.

Is it time to bring back the Pepsi Challenge?

While Coke wins for taste and perceived caffeine levels, amid the pandemic, PepsiCo fared far better than its rival. (Schwartz 2020) With restaurants, movie theaters, and sports stadiums closed, Coca-Cola’s sales dropped 28%. Meanwhile, PepsiCo’s sales have stayed flat—kept afloat by loyal Frito-Lay snackers.

COVID-19 has created an even playing field — or battle field if the brands want to wage a new war.

Further reading:

• Holodny, Elena. 2016. “The epic collapse of American soda consumption in one chart”. Insider. Online. Last accessed November 18, 2021.
• Little, Becky. 2019. “How the ‘Blood Feud’ Between Coke and Pepsi Escalated During the 1980s Cola Wars”. History. Online. Last accessed November 18, 2021.
• Schwartz, Ralph. 2020. “Unpopular Opinion: Why Pepsi Is Better Than Coke”. Mashed. Online. Last accessed November 18, 2021.
• Staff writer. 2020a. “2020 State of the Beverage Industry: Carbonated soft drinks sees value sales up”. Beverage Industry. Online. Last accessed November 18, 2021.
• Staff writer. 2020b. “2020 Insights on the Global Non-Carbonated Soft Drinks Market and the Impact of COVID-19 in the Medium Term – ResearchAndMarkets.com”. Online. Last accessed November 18, 2021.

A version of the preceding article was originally published on MFour’s blog.