Business Rivalry of Pepsi and Coke

Must read

HISTORY

The brands have been fighting each other for more than a century. The narrative began in 1886 when John S. Pemberton developed the original recipe known as Coke. In 1891, this Coca-Cola formula was sold to ASA Candler for 23 dollars of cash and some popular rights. And after all, He established the company Coca-Cola In 1892. This time Coca-Cola was becoming trendy.

There another American pharmacist capitalist Caleb D. Bradham was engaged in preparing the alternative of Coca-Cola. He was preparing that formula in his drug store. In 1893 he made a soft drink that could compete with Coca-Cola. He started serving that Drink to his customer, who comes to his drug store, and customers also liked his Drink. His Drink becomes famous as the brand’s Drink. In 1898 he changed his drink name to Pepsi. Despite having good sales, Pepsi was still far behind Coca-Cola. Because that time, coco-cola was the only Drink available in every state.  

In 1899 Coca-Cola signed its first agreement with independent bottling. The company got the right to buy and distribute its drinks. Since then, that unique distribution system came into existence, on which the entire soft drink industry rests. Even after competing since the early twentieth century, both these companies were in demand.

During the first war in 1914, both suffered significant economic losses, especially to Pepsi cola. In 1919 The Coca-Cola Company was purchased by a group of investors, headed by businessman Ernest Woodruff. Due to this world war, Sugar prices increased drastically. The Coca-Cola Company somehow endured this setback, but in 1923, the Pepsi Cola Company got bankrupt. Meanwhile, Pepsi management proposed to buy Pepsi in front of Coca-Cola, Which Coca-Cola rejected. 

In the same year, Pepsi was purchase by Roy C. Mergargel. Still, even after many tries, he got to fail to revive this company. After all, in 1929, Charles g Guth, president of loft incorporative (chain of the candy stores) and founder of modern Pepsi cola, drops Coca-Cola and buys Pepsi. Guth made some changes in Pepsi; due to this change, the taste of Pepsi also started to resemble Coca-Cola. He started selling Pepsi at huge discounts.

Beginning of cola war 

The rivalry between two of the most popular sodas in the world has existed for over decades now. While both Pepsi and Coca-Cola might look similar and even taste similar to some, both the beverages have incredibly loyal fan bases they beg to differ. The fans and the companies themselves have been at odds with each other since the 80s. This was where competition for a luggage collision started taking place. Charles g Guth started selling Pepsi at huge discounts.

On the one hand, Cocoa-Cola was selling 150ml bottles in 5 cents, and on another side, Pepsi was selling 300ml bottles in just 5 cents. It was a courageous move. In just two years, Pepsi’s profit doubled. The Pepsi that the Coco Cola company refused to buy had become its most significant rival today.

Charles G Guth is also called the Father of Modern Pepsi due to the revival of Pepsi. 

Now the Second World War had started, but now, Pepsi also made the prudent decision to purchase a sugar plantation in Cuba in 1940 to avoid any more issues with sugar insufficiency. In 1949 Alfred N. Steele became the new CEO of Pepsi cola. Before this, he was the Vice President of The Coca-Cola Company. Steele has raised Pepsi to great heights and increased Pepsi-Cola’s net earnings through his marketing skills and advertisements campaign. That was the reason that Pepsi’s sales had tripled in the 1950s and 60s. 

Since 1950, the Cocoa-Cola company has been expanding its reach in the Indian market. On the other hand, in 1956, Pepsi was launched in India. Pepsi sales were meager in India, so in 1961, Pepsi ended its business in India. Coco-Cola benefited the most from this; he captured 80% of the Indian market.

After the Second World War, both these companies started diversifying themselves. Since then, these companies have become business partners with popular brands around the world. Coca-Cola introduced Minute Maid Corporation in 1960 and Lemon Lime Drink Sprite in 1961. On the other hand, in the 1960s, Pepsi bought mountain dew, and in 1965 after the merger with Frito lay in 1965, the Pepsi Cola Company was renamed PepsiCo. Frito lay is an American snack food manufacturing company, which owns a snack food brand like Lays, kukure in India. In 1970, Pepsi bought Spanish brand Mirinda to compete with Fanta. 

In 1977, the Swadeshi movement in India was at its peak; due to some legal barriers, Coco-Cola terminated its business from India. After this incident, Thumbs Up, one of the best soft drinks by the Coco-Cola Company, lovingly was prepared by Parle Company. On the other hand, The Pepsi Company played its historic marketing promotional claim in 1975, which they called the Challenge. In this Challenge, People were blindfolded and asked to do a blind test of Coke and Pepsi, most of whom called Pepsi better than Coke. Pepsi carried out this Challenge on a large scale. Due to the ongoing cola war in both these companies, it started becoming popular like any movement. This incident left no stone unturned to tarnish Coco Cola’s image. At this time, Pepsi was giving tough competition to Coca-Cola on every front. Because of which Coca-Cola took a decision that significantly dropped the brand value of the company. 

In 1985, due to the cola wars, the Coco Cola Company changed its century-old cold Coca-Cola recipe and named this new Coke as coke 2and the customers badly rejected this new Coke. In 1986, Pepsi Introduced Mango Flavoured Drink Slice and two years later bought the American brand seven up. In the same year, Pepsi returned to India again after a tie-up with some Indian companies. On the other hand, Coca-Cola was focusing on expanding its business in China. 

 After all, in 1993, Coca-Cola came back to India and entered into a partnership with the Parle Company. During this time, he also bought Thumbs Up, Limca maza, and other brands, and in 2001, Coca-Cola stopped making and selling its Coke 2 ultimately. PepsiCo bought Tropicana in 1998, after which it gradually acquired brands such as KFC, Pizza Hut. In December 2005, for the first time in Pepsi’s 112-year history, its market value exceeded Coca-Cola’s. 

 If we talk about the present, today the business of these two companies is spread worldwide but on the other hand, most of Coca-Cola earns through soft drinks, whereas PepsiCo earns more than 50% from snack foods and other products. Although this cola war was over in the 90s itself, according to experts, this competition continues today. 

More articles

- Advertisement -

Startup

Applying Method To Hustle: How New-Age Businesses Scale

Scaling up can, and will, vary from business to business, but what is of greater utility is to understand how this scale can...
- Advertisement -

Latest article