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Cola Wars

Case Study

“Cola War Continues:
Coke and Pepsi in the 21st Century”

Group members
|Inês Claro |Student no. 194 |
|Israel Rodriguez |Student no. 102 |
|Tomas Lino |Student no. 071 |

Introduction

Carbonated Soft Drinks (CSD) are beverages produced by combining a series of ingredients such as flavoring concentrate, sweetener, and carbonated water. The industry traditionally comprises a manufacturer that sells concentrate to independent bottlers in local territories and performs some marketing functions.

The main suppliers are companies that produce sugar (the primary ingredient of CSD) and companies that produce packaging materials. There is no company with exclusive production of any component and, as a result, there are many alternative suppliers of each component.

Concerning buyers, most specifically retail outlets, the places with higher CSD sales are food stores with a share of market of 34,8%, followed by fountain outlets (23,1%) and others, such as convenience stores and vending machines.

There are five major CSD groups: Coca-Cola Company, Pepsi-Co, Inc., Cadbury Schweppes, Dr Pepper/Seven-Up Cos. and Royal Crown.

In the 1940s, Coca-Cola was the leader in CSD sales with shares as high as 60%. Afterwards competitors started to appear and followed its lead by establishing exclusive bottling deals and investing heavily in advertising. Pepsi-Cola, Royal Crown, and Seven-Up were founded after Coca-Cola, and became Coca-Cola’s main competitors.

After World War II, the CSD industry evolved into a kind of duopoly, with PepsiCo’s share rising, and Coca-Cola’s share declining.

In the 1970s the consumption of CSD in the U.S. market was about 23 gallons per year, growing by an average of 3% over the next 30 years, having reached 53 gallons in 2000 (a 130%...