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Coca Cola is formulated for the 1st time
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Coca Cola is born
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Pepsi is born
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Original Coca Cola Franchise agreement
It was a fixed-price contract that did not provide for renegotiation, even if ingredient costs changed. After considerable negotiation, often accompanied by bitter legal disputes, Coca-Cola amended the contract in 1921, 1978, and 1987 -
Pepsi 1st Bankruptcy
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Pepsi lowered prices (Great Depression)
Pepsi lowered the price of its 12-oz bottle to a nickel—the same price that Coke charged for a 6.5-oz bottle. In the years that followed, Pepsi built a marketing strategy around the theme of its famous radio jingle: “Twice as much for a nickel, too.” -
Pepsi 2nd Bankruptcy
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Coca Cola sues against Pepsi
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Coca Cola sells beverages to military
“Every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs the company.” Beginning in 1942, Coke won exemptions from wartime sugar rationing for production of beverages that it sold to the military or to retailers that served soldiers. During the war the U.S. government set up 64 such plants overseas—a development that contributed to Coke’s dominant postwar market shares in most European and Asian countries. -
Alfred Steele becomes Pepsi's CEO
Alfred Steele was a former Coca Cola Marketing Executive.
Steele made “Beat Coke” his motto and encouraged bottlers to focus on take-home sales through supermarkets. To target family consumption, for example, the company introduced a 26-oz bottle. Pepsi’s growth began to follow the postwar growth in the number of supermarkets and convenience stores in the United States -
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Pepsi battles Coke aggressively in US and double its market share
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Coca Cola partners with Mc Donald's
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Coca Cola expands to overseas markets
Coke focused primarily on overseas markets, apparently basing its strategy on the assumption that domestic CSD consumption was approaching a saturation point. -
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Coca Cola and Pepsi take control own their own can production
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Coca Cola and Pepsi introduced new cola and non-cola flavors
Coke launched Fanta (1960), Sprite (1961), and the low-calorie cola Tab (1963). Pepsi countered with Teem (1960), Mountain Dew (1964), and Diet Pepsi (1964). -
Pepsi Generation is launched
The campaign helped Pepsi narrow Coke’s lead to a 2-to-1 margin. At the same time, Pepsi worked with its bottlers to modernize plants and to improve store delivery services. By 1970, Pepsi bottlers were generally larger than their Coke counterparts. -
Pepsi Co is born
Pepsi merged with snack-food giant Frito-Lay to form PepsiCo -
Pepsi bottlers exceed Coke ones
Throughout this period, Pepsi sold concentrate to its bottlers at a price that was about 20% lower than what Coke charged. In the early 1970s, Pepsi increased its concentrate prices to equal those of Coke. To overcome bottler opposition, Pepsi promised to spend this extra income on advertising and promotion. -
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Average increase in consumption of CSD beverages
Americans consumed 23 gallons of CSDs annually in 1970, and consumption grew by an average of 3% per year over the next three decades. Fueling this growth were:
- the increasing availability of CSDs
- the introduction of diet and flavored varieties
- the declining real (inflation- adjusted) prices that made CSDs more affordable -
Pepsi Challenge
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Competitive Struggle between Coca Cola and Pepsi
In a “carefully waged competitive struggle” that lasted from 1975 through the mid-1990s, both Coke and Pepsi achieved average annual revenue growth of around 10%, as both U.S. and worldwide CSD consumption rose steadily year after year -
Pepsi enters the fast-food business
Pepsi entered the fast-food restaurant business by acquiring Pizza Hut (1978), Taco Bell (1986), and Kentucky Fried Chicken (1986), -
1st CSD Plastic Package
The Plastic Package allowed for larger and more varied bottle sizes. -
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Coca Cola starts renegotiating its franchise bottling agreement
Coke renegotiated its franchise bottling contract to obtain greater flexibility in pricing concentrate and syrups. New contract approved in 1978 but only after Coke agreed to link concentrate price changes to CPI (price adjusted to reflect any cost savings associated with ingredient changes, to supply unsweetened concentrate to bottlers that preferred to buy their own sweetener). Coke was then back in line with Pepsi (which traditionally had sold unsweetened concentrate to its bottlers) -
Pepsi overcomes Coca Cola in food stores
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Pepsi dominates the market for CSD Beverages
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Soft Drink Interbrand Competition Act
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Coca Cola switches from sugar to high-fructose corn syrup
Lower-priced alternative -
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Coca Cola and Pepsi introduce new products
Coke introduced 11 new products, including Caffeine- Free Coke (1983) and Cherry Coke (1985). Pepsi introduced 13 products, including Lemon-Lime Slice (1984) and Caffeine-Free Pepsi-Cola (1987). The number of packaging types and sizes also increased dramatically, and the battle for shelf space in supermarkets became fierce. The struggle for market share intensified, and retail price discounting became the norm.
Coca Cola and Pepsi's growth put a squeeze on smaller concentrate producers. -
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Coca Cola intensifies its marketing effort
Meanwhile, Goizueta sold off most of the non-CSD businesses that he had inherited, including wine, coffee, tea, and industrial water treatment, while retaining Minute Maid. -
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Pepsi intensifies its marketing efforts
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Diet Coke is introduced for the first time (3rd CDS product in the market)
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Pepsi switches from sugar to high-fructose corn syrup
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Coca Cola Formula changes
The reformulation prompted an outcry from Coke’s most loyal customers, and bottlers joined the clamor. Three months later, the company brought back the original formula under the name Coca-Cola Classic, while retaining the new formula as its flagship brand under the name New Coke. Six months later, Coke announced that it would henceforth treat Coca-Cola Classic (the original formula) as its flagship brand. -
Coca Cola Enterprises (CCE) is born
Independent bottling subsidiary.
CCE consolidated small territories into larger regions, renegotiated contracts with suppliers and retailers, merged redundant distribution and purchasing arrangements, and cut Coca Cola work force by 20%. CCE also invested in building 50-million-case production lines that involved high levels of automation. Coke continued to acquire independent franchised bottlers and sell them to CCE becoming an "investment banking firm specializing in bottler deals". -
Coca Cola Master Bottler Contract
It granted Coke the right to determine concentrate price and other terms of sale.14 Under this contract, Coke had no legal obligation to assist bottlers with advertising or marketing.
The contract did not give complete pricing control to Coke but rather used a formula that established a maximum price and adjusted prices quarterly according to changes in sweetener pricing.
This contract differed from Pepsi’s Master Bottling Agreement (1999) with its top bottler. -
Competition for fountain market becomes intense
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Coca Cola supplies Burger King and Wendy's
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Coca Cola and Pepsi stop can production
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Coca cola market share began dropping
MS drops from 71% in 1990 to 55% in 2009 -
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Cadbury Schweppes emerges as main competitor of Coca Cola and Pepsi
In the 1990s, through a series of strategic acquisitions, Cadbury Schweppes emerged as the third-largest concentrate producer—the main competitor of the two CSD giants. It bought the Dr Pepper/Seven-Up Companies in 1995, and continued to add such well-known brands as Orangina (2001) and Nantucket Nectars (2002) to its portfolio. Then in 2008, Cadbury’s beverage business was spun off into an independent company, Dr Pepper Snapple Group. -
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Negative shift in the market for Soft Drink Industry and "Soda Tax"
This shift in consumption patterns evolved around the growing linkage between CSDs and health issues such as obesity and nutrition. -
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Pepsi campaign to gain the right to sell fountain syrup via restaurants
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PepsiCo starts Tricon
Tricon is the name of PepsiCo restaurant business -
Pepsi Bottling Group (PBG) is born
In the late 1980s, Pepsi acquired MEI Bottling for $591 million, Grand Metropolitan’s bottling operations for $705 million, and General Cinema’s bottling operations for $1.8 billion. After operating the bottlers for a decade, Pepsi shifted course and adopted Coke’s anchor bottler model. In April 1999, the Pepsi Bottling Group (PBG) went public, with Pepsi retaining a 35% equity stake in it. -
Pepsi Master Bottler Agreeement
That agreement granted the bottler perpetual rights to distribute Pepsi’s CSD products but required it to purchase raw materials from Pepsi at prices, and on terms and conditions, determined by Pepsi. Pepsi negotiated concentrate prices with its bottling association, and normally based price increases on the consumer price index (CPI) -
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Decline of CSD consumption
Coca Cola and Pepsi relationship began to fray in the early 2000s, as U.S. per-capita CSD consumption started to decline. -
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Coca Cola and Pepsi intensifies innovation and marketing to face decline in CDS sales
Coca Cola revealed a new Freestyle soda machine in 2009 which could create dozens of different kinds of custom beverages. It also placed a greater emphasis on promoting its brands: it spent millions in advertising for its flagship Cola-Cola drink, in sponsorships and global marketing (World Cup in 2010). Meanwhile, Pepsi redesigned its logo in 2008 with a three-year rebranding plan that could cost over $1 billion to rejuvenate its image -
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Coca Cola and Pepsi introduce non-CDS beverages
Both Coke and Pepsi intensified their efforts to use alternative sweeteners: Coca Stevia is born. Between 2004 and 2007, 77% of Pepsi’s new products released in the U.S. market were non-carbs compared to Coke’s 56%.50 But starting in 2007, Coke aggressively expanded its non-carbs product portfolio through acquisitions. -
Coca Cola wins Subway (from Pepsi)
In the same year Pepsi grabbed the Quiznos account from Coke -
Coca Cola Zero is born
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Coca Cola and Pepsi expand toward emerging countries
In particular, China and India emerged as future battlegrounds with a large, growing middle-class population. Each company planned to invest about $2 billion in China over the next few years to build up their market presence. Since CSD consumption abroad was generally lower compared to the United States, Coke and Pepsi aggressively pursued non-carbs opportunities in global markets. At the same time, overseas markets enabled Coke and Pepsi to broaden the scope of innovation. -
Coca Cola aggressively expanded its Non-Carbs product portfolio
through acquisitions: $4 billion purchase of Energy Brands (Biggest acquisition Coke had ever made) -
Lowest CSD consumption level
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Coca Cola holds 69% share of national pouring rights
against Pepsi’s 20% and DPS’ 11%.2 -
Coca Cola has the most consolidated system of bottlers
Bottler consolidation made smaller concentrate producers increasingly dependent on bottling networks for distribution -
Pepsi has 43% of the U.S. Non-Carbs Market share
Compared to Coke’s 32%. -
Bottle-water category fell down
Price-sensitive consumers sought cheaper alternatives such as private label bottled-water or tap water, exhibiting little brand loyalty compared to CSDs. Environmentalists also became more vocal in their criticisms against the use of plastic bottles, known as PET, which had a recycling rate below 25%. Bottled water started to generate negative operating profit margins. -
Pepsi acquires two of its biggest bottlers: PBG and Pepsi America
The offer came just about ten years after Pepsi had spun off PBG into an independent company. The merger would consolidate more than 80% of Pepsi’s North America beverage operations under one roof. -
Coca Cola buys its CCE’s North American operations
Coke, which had been a loyal defender of the franchise bottling system, surprised the world with its decision to buy CCE’s North American operations in February 2010. The deal brought back 90% of Coke’s North America business under its control. In return, CCE bought Coke’s own bottling operations in Norway and Sweden and received the option to buy Coke’s stake in its German bottling business at a later date.