Why the Cola Wars was the largest rivalry of the 20th century

George Walker, Tuesday, 9 February 2021



Coca-Cola gave us the modern-day Santa Claus, and Pepsi set the King of Pop on fire. Before there was Apple versus Microsoft, and even before Puma’s founder took on that of Adidas – his own brother – there was the cola wars, arguably the largest brand rivalry of our time, spanning over a century. Even today, it remains a polarizing debate, but just where did it start, and how has it lasted as long as it has?

Their respective flagship products were invented only 13 years apart. Coca-Cola took off: the company as we know it today was founded in 1892, and by the roaring twenties, it has expanded its operation across North and South America, as well as entering France, while the company behind Pepsi Cola was bankrupted by 1923 because of WWI sugar rationing. Its assets were sold on, however, the company was bankrupt again within the decade.

Despite its rocky start, Pepsi was thriving by the mid-1930s (as were Coca-Cola). By the 1950s, it was all about marketing – Coke is trademarked, and the company’s first advert hits TV and radio, while Pepsi boasted Joan Crawford as their ambassador (she was married to the company’s president). The 1960s saw The Coca-Cola Company being listed on the NYSE, while The Pepsi Cola Company merged with Frito-Lay to become PepsiCo. The competition was stiff – for each major move the one made, the other came back stronger.

During the 1970s and 1980s, the Cola Wars were at their peak. In 1971, Coca-Cola released one of its most iconic ads to date: I’d Like To Buy The World a Coke. A year later, Pepsi became the first Western product to be sold in the former Soviet Union. They not only mirrored each other’s highs, but also their lows; within a year of Michael Jackson’s hair catching fire on the shoot of a Pepsi commercial, Coca-Cola’s launched ‘New Coke’, changing the recipe for the first time in a century – it flopped, and that decision was quickly reversed.

From the ‘90s onwards, almost a century in, the infamous rivalry began to die down. Each company forged its own path, focusing on longer-term partnerships, including Coca-Cola’s 100-year deal with the NBA (which Pepsi took over in 2015), and different projects, like Pepsi’s $500 million Project Blue.

Both companies are behemoths in their own right – The Coca-Cola Company ($KO) is worth over $210 billion, while PepsiCo ($PEP) isn’t far behind with a market cap of $194 billion (at time of writing). PepsiCo, however, with 53% of its business being food products (compared to Coca-Cola’s being strictly beverages), posted revenues almost double that of Coca-Cola’s in 2019.

PepsiCo shares are up 42% over the last five years, whereas Coca-Cola has gained just under 15% in that same period. YTD, both companies’ stocks are down. Coca-Cola and PepsiCo are expected to post their Q4 earnings on Wednesday and Thursday respectively, before the opening bell.


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