Nov. 30, 2025

Coke Vs. Pepsi " - The Marketing War That Divided Every Thanksgiving Table in America"

Show Notes
Transcript

In 1975, Pepsi did something that would haunt Coca-Cola for decades: they told the truth. They set up tables in shopping malls across America, offered people two unmarked cups, and asked a simple question: which tastes better?

The answer—consistently, across demographics, confirmed by Coke's own internal research—was Pepsi.For a company that had dominated the soda market for nearly 90 years, that had rejected buying bankrupt Pepsi for pocket change not once but twice, this was intolerable. The Pepsi Challenge was eroding Coke's market share, destroying their mystique, and proving that people actually preferred their competitor's sweeter formula.

So in 1985, after 99 years of the same secret recipe, Coca-Cola did the unthinkable: they changed their formula to taste more like Pepsi. They called it New Coke, spent $4 million on research, and launched it with absolute confidence that they'd finally beaten Pepsi at their own game.Within 24 hours, Americans were calling their headquarters to scream. Within weeks, people were hoarding old Coke like prohibition was coming back. Within 79 days, Coca-Cola committed what's still considered the biggest marketing blunder in corporate history—and somehow emerged more dominant than ever.

This Sunday after Thanksgiving, as your family argues about whether someone bought the wrong cola again, we're exploring the 130-year war that taught corporations how to turn carbonated sugar water into identity, preference into passion, and two pharmacists' fever dreams into the longest marketing battle in American history.

Because when titans collide over something this meaningless, they create modern advertising, celebrity culture, and the reason your Thanksgiving table will never have peace.

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Calaruga Shark Media. Thanksgiving twenty twenty five. Somewhere in suburban America,

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a family is setting the table for dinner. The turkey

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is golden, the stuffing is steaming, and someone has made

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the critical error of putting both coke and pepsi on

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the table. Mom. Seriously, the daughter says, pointing at the

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red cans next to the blue ones. You know, Dad

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only drinks coke. Your brother is bringing his girlfriend. Mom replies,

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she's a pepsi person. Dad walks in, sees the pepsi

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and stops cold. We're a coke family. It's just soda, Dad,

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It's not just soda. It's about principles. Is episode thirty nine.

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The Pepsi Challenge, Coke versus Pepsi, the one hundred thirty

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year marketing war that divided every Thanksgiving table in America.

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This scene plays out in thousands of American homes every Thanksgiving.

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The great divide, the unspoken allegiance, the irrational but deeply

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held conviction that one brown carbonated sugar water is fundamentally, morally,

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spiritually superior to another brown carbonated sugar water. It's ridiculous,

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it's tribal, and it's the result of the longest, most expensive,

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most culturally significant marketing war in American history. The Coke

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versus Pepsi feud has been raging for over one hundred

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thirty years. It survived two World wars, the Great Depression,

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and the invention of diet soda. It's cost both companies

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billions of dollars. It's created modern advertising as we know it.

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It's turned celebrities into spokespeople and Super Bowl commercials into

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cultural events. It's made both companies worth nearly two hundred

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billion dollars each. And in nineteen eighty five, it drove

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one of them so insane with competitive anxiety that they

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committed what's widely considered the biggest marketing blunder in corporate history,

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a mistake so catastrophic it made customers flush their product

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down toilets, stockpile cans in their basements, and form literal

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protest groups. The disaster lasted exactly seventy nine days. When

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it was over, the company that had seemed to lose

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had actually won bigger than ever. Sale sared, market share increased.

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Conspiracy theorists still argue whether it was the greatest mistake

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or the greatest marketing trick of all time. But here's

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the thing about the Cola Wars. For all the billions

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spent on advertising, celebrity endorsements, and Super Bowl spectacles, the

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rivalry almost never happened because in nineteen twenty three and

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again in nineteen thirty one, Pepsi went bankrupt and begged

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Coca Cola to buy them, and Coca Cola said no twice.

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Welcome back to feuds, power, pride, and payback. I'm Marcus Reid.

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Some feuds are about people, some are about power. This

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one is about the color of the can you grab

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from the refrigerator and why that choice says more about

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American culture, marketing, psychology, and brand loyalty than any product

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has a right to act. One the Pharmacists War. The

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story begins in eighteen eighty six in Atlanta, Georgia, where

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a pharmacist named John Pemberton was trying to cure his

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morphine addiction. He'd been wounded in the Civil War, got

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hooked on pain medication and was desperate to find an alternative.

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So he did what any reasonable nineteenth century pharmacist would do.

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He invented a medicinal tonic made from coca leaves. Cola, nuts, sugar,

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and carbonated water. He called it Coca Cola, marketed it

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as a cure for morphine addiction, headaches, and neurasthenia, which

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was the Victorian way of saying whatever ails you. The irony,

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of course, is that coca leaves contained cocaine, so Pemberton

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was essentially curing morphine addiction with a different drug. But

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that was eighteen eighty six. Things were different. Pemberton sold

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his formula to Asa Candler for two thousand, three hundred

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dollars in eighteen eighty eight roughly seventy five thousand dollars today,

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and promptly died. Candler, a better businessman than Pemberton, ever,

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was removed the cocaine after the Pure Food and Drug

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Act made that awkward, ramped up the sugar, and started

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aggressive marketing. By eighteen ninety five, Coca cola was sold

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in every US state. The secret formula was locked in

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a vault. The distinctive contoured bottle was designed in nineteen

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fifteen specifically so people could recognize it by touch in

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the dark or when broken on the ground. Coke wasn't

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just a drink. It was becoming an American icon and Then,

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in eighteen ninety three, a pharmacist named Caleb Bradham in

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New Bern, North Carolina, invented his own medicinal tonic. He

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called it Brad's Drink at first, not exactly catchy, but

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in eighteen ninety eight he renamed it Pepsi Cola, claiming

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it aided digestion and boosted energy. The name came from pepsin,

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the digestive enzyme, and cola nuts. For a while, the

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two companies coexisted. Coke was the established leader, Pepsi was

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the regional upstart. There was room for both in America's

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rapidly growing soft drink market. But then came nineteen twenty three. Pepsi,

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which had expanded too aggressively during World War One when

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sugar was expensive and supply chains were chaos, went bankrupt.

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The company was drowning in debt, couldn't afford its sugar contracts,

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and was weeks away from disappearing forever. In desperation, Pepsi's

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owner approached Coca Cola with an offer, buy us, take

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our formula, our bottling plants, our distribution network, eliminate your

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only real competitor for pennies on the dollar Coca Cola

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said no, it was an arrogance. Well, not entirely. Coke's

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leadership genuinely didn't see Pepsi as a threat. They were

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so dominant, so confident in their market position, that the

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idea of buying out a failing competitor seemed unnecessary. Why

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spend money on a company that was already dying. Pepsi

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was bought by Roy Meggergil for thirty thousand dollars. By

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nineteen thirty one, Pepsi was bankrupt again, and again someone

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approached Coca Cola about buying the company, and again Coca

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Cola said no. This time, Pepsi was purchased by Charles Gouth,

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the owner of Loft Candy Stores, for practically nothing. Gouth

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was actually a Coke customer. He sold it in his

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stores until Coke refused to give him a volume discount.

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In a fit of spite, Gooth bought bankrupt Pepsi and

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started selling that instead. Hell hath no fury like a

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candy store owner denied a bulk discount. Isn't a saying,

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but maybe it should be. Gooth's first move was brilliant

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in nineteen thirty four, during the Great depression, when every

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penny mattered. Pepsi started selling twelve ounce bottles for the

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same nickel that bought a six point five ounce coke

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twice as much for a nickel too. The jingle went,

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Pepsi Cola is the drink for you. Americans crushed by

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economic depression started buying Pepsi not because it tasted better.

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Coke still dominated in taste tests, but because you got

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more for your money. Pepsi became the working class choice,

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the value option, the drink of people who couldn't afford

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to pay twice as much for a coke. Coke noticed,

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but didn't panic. They still owned the market. Pepsi was surviving, sure,

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but as the cheap alternative the Walmart to Coke's target,

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the generic brand that existed because poor people needed so two.

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By the nineteen fifties and sixties, both companies had settled

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into an uneasy equilibrium. Coke led with about sixty percent

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market share. Pepsi followed with twenty to twenty five percent.

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Coke was the sophisticated choice, the classic American brand, the

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soda that suited up. Pepsi was younger, hipper, less expensive.

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The Pepsi generation Marketing positioned it as the choice of

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youth and rebellion. They competed. Yes, they sniped at each

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other in ads, Yes, but it was civilized corporate warfare.

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Two pharmacists fever dreams, both thriving, both making money, neither

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willing to risk everything on total victory. And then Pepsi

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did something in nineteen seventy five that changed everything. Something

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so aggressive, so risky, so psychologically devastating that it drove

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Coca Cola to commit corporates suicide just to make it stop.

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They told the Truth, Act two. The challenge. The Pepsi

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Challenge launched in nineteen seventy five in Dallas, Texas, but

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it might as well have been launched in Coke's Atlanta headquarters,

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with a note saying, You're not as good as you

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think you are. The concept was diabolically simple. Set up

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a table in a shopping mall, offer shoppers two unmarked cups,

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one with Pepsi, one with Coke, have them taste both

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and choose which they prefer. Film Everything Marketing executive John Scully,

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who'd later become Apple's CEO and have his own legendary

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feud with Steve Jobs, championed the campaign. People say they

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prefer coke because that's what they've always drunk, Scully argued,

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but what do their taste buds actually say? The results

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were shocking. In blind taste tests, more people preferred pepsi,

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not a few more people, significantly more consistently across demographics.

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Pepsi's sweeter formula, which had always been considered its weakness

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compared to Coke's more complex flavor, was actually more immediately

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appealing to the average palette. Coca Cola watched these TV

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commercials normal Americans choosing pepsi over coke in blind tests,

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and did what any data driven company would do. They

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called bullshit and ran their own studies. The internal research

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confirmed Pepsi's findings. In blind taste tests, people really did

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prefer pepsi. The reason was simple. Pepsi was sweeter, and

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in a quick sip, which is what taste tests measure,

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sweeter wins the human palette craves sugar, especially in that

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first take. Coke's slightly more bitter, more complex flavor profile

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was better over a full can, but in a one

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sip test, pepsi won. But facts don't matter when they're inconvenient.

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Coke had spent nearly a century building its brand on

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being the best, the original, the real thing. The idea

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that customers actually preferred Pepsi's taste was intolerable. For a decade,

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Pepsi ran the challenge on local markets across America, gaining

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ground everywhere they did it. By nineteen eighty three, Pepsi

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had closed the gap significantly. Coke still led, but its

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once unassailable market dominance was cracking in supermarkets where blind

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taste testing mattered most because people weren't drinking it on site.

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Pepsi actually outsold Coke at Coca Cola headquarters in Atlanta.

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Panic was setting in. The company that had rejected buying

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Pepsi for pocket change twice was watching that decision turn

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into an existential threat. They'd created their own monster by

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letting Pepsi survive. Coke tried fighting back with its own

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taste tests, but those backfired, revealing that even Koke's own

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research showed Pepsi winning blind comparisons. They tried attacking the

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methodology who drinks just one sip, but that sounded defensive.

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They tried ignoring it, but Pepsi's aggressive advertising made that impossible.

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By nineteen eighty four, Coke's leadership faced a decision that

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would define the company for the next century. If people

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prefer Pepsi's taste and we can't convince them not to

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believe their own tongues, maybe we need to change Coke's formula.

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The idea was heresy. Coca Cola's secret formula had been

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locked in a vault for ninety nine years. The company's

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entire brand was built on being the original, the unchanging classic,

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the drink your grandparents knew and your grandchildren would know

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the real thing. But the Pepsi challenge was working. Market

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share was eroding. Panic was replacing confidence, and in that panic,

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Coca Cola's executives convinced themselves that if they couldn't beat

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Pepsi's taste, they'd have to match it. On April twenty third,

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nineteen eighty five, Coca Cola announced they were changing their formula.

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After ninety nine years, they'd reformulated to be sweeter, more

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like Pepsi, designed to win blind taste tests. They called

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it New Coke, and America absolutely lost its mind. Act three,

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the seventy nine Day Disaster. The launch of New Coke

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was supposed to be Coca Cola's triumphant response to the

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pepsi challenge. They'd spent four million dollars on research conducted

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two hundred thousand taste tests confirmed that people preferred the

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new formula. They had celebrity endorsements lined up. They had

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an aggressive marketing campaign ready. What they didn't have was

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any understanding of what Coca Cola actually meant to Americans.

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The backlash was immediate and visceral. Within twenty four hours

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of the announcement, the company's headquarters received one thousand, five

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hundred phone calls from angry customers. By the end of

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the first week, it was eight thousand calls a day. Eventually,

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the company had to hire extra operators just to handle

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the rage. I felt like someone close to me had died,

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one customer told reporters. Another said, this is worse than

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the New Deal or prohibition. A third, showing the kind

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of proportional response the nineteen eighties were known for, said

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this is worse than when my son died. Protest groups

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formed the Old Cola Drinkers of America launched with sixty

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thousand members and a class action lawsuit to force Coke

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to bring back the original formula. Psychiatrists reported patients experiencing

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genuine grief over the loss of Coca Cola. Classic Seattle

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businessmen Gay Mulleins led a boycott and told reporters at

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first I was numb, then I was shocked. Then I

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started to yell and scream and run around the house

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over a soda formula change. Fidel Castro, who nationalized Coca

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Cola's Cuban operations in nineteen sixty, seized the opportunity to

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mock American capitalism. The imperialism of Coca Cola brought us

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a sign of the decadence of North American capitalism. The

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change in formula. When Fidel Castro is dunking on your

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marketing strategy, you've made a mistake. People were hoarding original

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coke like it was toilet paper. In twenty twenty, someone

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in Texas sold a case of old coke for one

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thousand dollars. Bars started advertising we still have original coke,

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like it was a competitive advantage. Customers poured new coke

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down toilets and filmed it for local news. Pepsi, watching

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their arch rival self immolate, took out full page ads

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declaring victory. After eighty seven years of going at it

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eyeball to eyeball, the other guy just blinked. The ad

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read Pepsi employees got the day off to celebrate Roger Enrico.

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Pepsi's CEO later called it the Pepsi generation's moment of triumph.

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But here's where it gets interesting. New Coke actually did

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taste better, and blind tests, even after the backlash, when

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researchers ran side by side comparisons, more people still preferred

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New Coke's flavor. The problem wasn't the taste, it was

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everything else. We had taken away something that people loved.

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A Coke executive later admitted, we had messed with their childhoods,

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their memories, their sense of stability. We weren't selling sugar water.

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We were selling America. Donald Keo, Coca Cola's president, described

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the internal panic. We knew we were in trouble when

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the letters stopped being angry and started being sad. Angry

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we could handle. Sad meant we'd broken something we couldn't fix.

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By late June, just two months after New Cooke's launch,

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the company faced an impossible situation. New Coke was out

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selling Pepsi in some markets. Technically a success, but Original

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Coke loyalist were abandoning the brand, entirely, buying competitors products,

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or just not buying Cola at all. The company was

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losing more market share with New Coke than it had

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been losing to the pepsi challenge. On July tenth, nineteen

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eighty five, ABC News broke the story that Coca Cola

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was bringing back the original formula. The next morning, July eleventh,

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the company made it official Coca Cola Classic would return

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to shelves alongside New Coke. The press conference was supposed

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to be somber, a humbled company admitting defeat. Instead it

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turned into a celebration. Peter Jennings interrupted the soap opera

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General Hospital to announce the news live. Senator David Pryor

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of Arkansas called it a meaningful moment in US history.

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The company received eighteen thousand calls in one day, nearly

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all of them positive. You have given us back our dream,

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one customer wrote, another, you have brought me back to

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the fold. The stock price jumped, Coca Cola Classic flew

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off shelves, and in one of the most remarkable turnarounds

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in marketing history, Coke's market share didn't just recover, it

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grew beyond where it had been before New Coke launched.

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The seventy nine day disaster became a triumph by essentially

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killing Coca Cola and then resurrecting it. The company had

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reminded America why they loved it in the first place.

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The publicity from the controversy was worth hundreds of millions

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in free advertising, and customers who'd taken Coke for granted

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suddenly appreciated it again, which led to one of business

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history's enduring conspiracy theories. Was New Coke planned all along?

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Did Coca Cola deliberately create a terrible product, let America revolt,

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then swoop in with the original formula to remind everyone

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why they loved it? Was the whole thing. The research,

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the taste tests, the press conference, an elaborate marketing stunt.

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Donald Keyo's response became legendary. We're not that dumb and

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we're not that smart. Most analysts agree it wasn't planned.

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The evidence, the panic, the cost, the internal chaos suggests

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Coca Cola genuinely believed New Coke would work and was

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blindsided by the backlash. But whether intentional or not, the

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end result was the same Coke had won the Cola

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Wars by losing a battle so badly that America decided

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to save them. By nineteen eighty six, Coca Cola Classic

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was back to market dominance. New Coke still existed, briefly

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renamed Coke Too, but nobody cared anymore. The Pepsi challenge

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had driven Coke to desperation. Desperation had driven them to disaster,

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and disaster had reminded everyone why Coca Cola was the

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real thing. Pepsi had won every battle, the taste tests,

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the blind comparisons, the market share gains, and still lost

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the war because Americans, it turned out, didn't want the

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soda that tasted better in a single sip. They wanted

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the soda that tasted like childhood, like summer, like America.

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New Coke was officially discontinued in two thousand and two.

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Coca Cola Classic dropped the Classic designation in two thousand

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and nine. The formula, the same one that people rioted

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to bring back, is what you drink today when you

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order a Coke. But the Cola Wars weren't over. They

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were just entering a new phase, and both companies were

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about to learn that while they'd been fighting each other,

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the world had moved on Act four, the modern Wars.

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The nineteen nineties and two thousands saw the Coola Wars

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expand beyond taste tests and formula changes into something bigger,

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total cultural domination. Pepsi doubled down on celebrity endorsements, turning

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spokespeople into their primary strategy. Michael Jackson's nineteen eighty four

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deal for five million dollars, announced right before new Coke launched,

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was the largest celebrity endorsement in history at the time.

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Then came Ray Charles Madonna, Britney Spears, Beyonce. Pepsi wasn't

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selling soda, it was selling coolness, youth, and cultural relevance.

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Coke responded by focusing on emotional marketing. The I'd like

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to buy the world A Coke commercial from nineteen seventy

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one had shown them the power of feelings over flavor.

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They leaned into nostalgia, tradition, and universal moments of happiness.

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Coke's ads made you feel something. Pepsi's ads made you

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want to be someone. Both companies expanded into new products.

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Diet Coke launched in nineteen eighty two, and became an

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instant hit. Pepsi introduced Diet Pepsi, Pepsi Max, and a

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revolving door of flavor variations. The cola isle stopped being

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just Coke versus Pepsi and became an arms race of options,

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and then came the restaurant wars. Pepsi bought Kentucky Fried Chicken,

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Pizza Hut, and Taco Bell, not because they wanted to

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be in the restaurant business, but to guarantee Coke couldn't

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be every KFC, every Pizza Hut, every Taco Bell became

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a Pepsi only zone. Coke fought back by locking up McDonald's, Wendy's,

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and Burger King. Ordering a soda at a fast food

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restaurant wasn't about taste anymore. It was about which company

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had paid more for exclusive rights. But while Coke and

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Pepsi spent billions fighting each other, the world was changing.

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Health Conscious consumers were moving away from sugary SODA's entirely

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energy drinks, bottled water, juice, and coffee were stealing market

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share neither company could reclaim by fighting each other. The

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moment of reckoning came in twenty ten when diet Coke

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overtook Pepsi to become America's number two soda. Pepsi had

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spent seventy five years trying to be number one and

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instead got knocked to number three by Coke's own diet version.

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Pepsi's response was strategic. They pivoted hard into snacks. Fredo

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Lay became their growth engine. Dorito's Cheetos, Laze potato chips

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all generated higher margins than soda with better growth prospects.

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By twenty twenty four, over half of PepsiCo's revenue came

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from food, not beverages. Coca Cola stuck with drinks, but diversified.

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They bought vitamin water, honest tea, Costa Coffee, and invested

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heavily in international markets where soda consumption was still growing.

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They became a beverage company, not just a cola company.

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The final humiliation for Pepsi came in twenty twenty three

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to twenty twenty four when Doctor Pepper, the quirky independent

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soda that nobody took seriously, tied and then overtook Pepsi

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for the number two spot in US market share. The

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company that had spent eighty years fighting to be number

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one was now struggling to stay number three. As of

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twenty twenty five, Coca Cola holds forty four percent of

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the US soda market. Doctor Pepper has roughly twenty four percent.

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Pepsi has twenty three percent. The gap between Coke and

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everyone else has never been wider. But here's the twist.

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Both companies are worth essentially the same amount round one

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hundred eighty five to one hundred and ninety billion dollars.

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Pepsiico's snack division has made them just as valuable as

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Coca Cola's beverage empire. Pepsi lost the Cola Wars, but

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wanted capitalism, and in two thousand and six, both companies

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learned something crucial about their rivalry when it was tested

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in the strangest way possible. A Coca Cola secretary named

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Joya Williams stole documents containing the recipe for a new

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product Coke was developing. She tried to sell the secrets

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to Pepsi for one point five million dollars, figuring Pepsi

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would pay anything for Coke's formula. Pepsi's response they immediately

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called Coca Cola and the FBI. We did what any

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responsible company would do. Pepsi's spokesman said, competition can be fierce,

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but it must also be fair and legal. Coke's executives

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were stunned. Their arch rival, the company that had spent

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billions trying to destroy them, that had run the Pepsi

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challenge for decades, that had celebrated when New Cooke failed,

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had just protected them from corporate espionage. There's honor among rivals.

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It turns out, Coke and Pepsi will fight each other

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until the sun explodes, but they'll do it by the rules,

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because if either one ever actually destroyed the other, who

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would they define themselves against? The rivalry had become the point,

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not victory, the fight itself. Epilogue What Thanksgiving Tables teach

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us as I record this episode the Sunday after Thanksgiving

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twenty twenty five. Coca Cola is one hundred thirty nine

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years old and Pepsi is one hundred twenty seven. Between them,

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they've spent hundreds of billions of dollars trying to convince

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you that carbonated sugar water with slightly different flavor profiles

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represents a meaningful choice worthy of loyalty, passion, and family.

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Arguments and you know what they succeeded. Right now, across America,

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families are dealing with Thanksgiving leftovers and having the same

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argument they have every year. Why did you buy pepsi?

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You know, I like coke. It was on sale. I

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don't care if it was free. We're a coke family.

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The Cola Wars didn't create better products. Coca Cola's formula

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is the same one they brought back in nineteen eighty

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five after the New Coke disaster. Pepsi's formula has barely

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changed since eighteen ninety eight. Neither company has discovered some

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radical innovation in carbonating sugar water. What they created instead

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was identity, brand loyalty, so powerful that people will drive

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to a different store if their preferred cola isn't in

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stock marketing, so effective that you can taste the difference

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between coke and pepsi in a blind test but swear

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they're not even close. Cultural imprinting so deep that your

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cola preference says something about who you are. Coke people

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see themselves as classic, traditional, authentic. Pepsi people see themselves

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as bold, young, different. It's tribalism over nothing, and it's brilliant.

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The Pepsi Challenge, for all its effectiveness at winning blind

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