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How the 'Blood Feud' Between Coke and Pepsi Escalated During the 1980s Cola Wars

June 11, 2019 in History

By Becky Little


The great Cola Wars of the 1980s were a battle between Coca-Cola and PepsiCo for dominance. The disastrous introduction of “New Coke” in 1985 appeared to set Coca-Cola back. Yet by the end of the year, it was clear the “mistake” had actually helped Coca-Cola’s sales, allowing Coke to retain its spot as the largest-selling soda over Pepsi.

The two companies were both well-established by the time the Cola Wars broke out. Coca-Cola dated back to 1886, when a pharmacist in Atlanta invented the drink and began selling it to soda fountains. Six years later, the Coca-Cola Company was founded by another Atlanta pharmacist who’d secured the recipe (which contained small amounts of cocaine until 1929). Up in North Carolina, another pharmacist invented his own sugar-drink in 1893. After seeing the success of Coca-Cola, he changed his soda’s name from “Brad’s Drink” to “Pepsi-Cola” in 1898 and founded the Pepsi-Cola Company in 1902.

Over the next several decades, Coke emerged as the more popular soda. Starting in 1931, its famous Santa Claus ads marketed it as a refreshing drink you could enjoy year round. Meanwhile, the Pepsi-Cola Company struggled financially and went through several reorganizations (in 1965, it merged with Frito-Lay, Inc. to become PepsiCo, Inc.). But in 1975, Pepsi started a marketing campaign that gave Coke a run for its money: the “Pepsi Challenge,” a blind taste test showing more people preferred Pepsi over Coke.

“The Pepsi Challenge was not just a marketing gimmick—it was true,” says David Greising, author of I’d Like the World to Buy a Coke: The Life and Leadership of Roberto Goizueta, Coca-Cola’s CEO. Internal studies at Coca-Cola “confirmed what the Pepsi Challenge was showing, which is that if you just look at the taste of the beverage, consumers preferred Pepsi,” which had a “sweeter, more syrupy flavor.”

Coke was still outselling Pepsi, but its market share was declining as Pepsi’s was rising. “Part of the problem with the success of the Pepsi Challenge was that Coke had fallen into a malaise as a brand,” he says. “People were in love with the notion of Coca-Cola but they weren’t necessarily drinking Coca-Cola.”


Cans of New Coke and Coca-Cola Classic on display during a news conference in Atlanta, 1985.

READ MORE: The New Coke Flop

In response, Coca-Cola started doing a few things differently. …read more

Source: HISTORY

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