Pepsi. Lost the cola war, won the aisle.
Pepsi has been losing to Coca-Cola for 60 years and is now twice the size. Coke won cola, and Pepsi won everything else.
THE GIST ON PEPSI: "Lost the cola war, won the aisle"
Who won the cola wars?
Pepsi has been losing to Coca-Cola for 60 years. Coke sells more cola, it owns Christmas, and being asked is Pepsi okay is one of the worst things you can be asked. Coke has 44% of the US market and Pepsi only 26.
And yet somehow Pepsi is twice the size of Coca-Cola.
What did Pepsi do that Coke didn't?
In 1965 Pepsi bought Frito-Lay. Salty snacks make people thirsty, so people buy Pepsi, and it doubled down. Doritos, Lay's, Cheetos, Quaker Oats, Gatorade, Tropicana, SodaStream.
How big is the snack empire?
While Coke fought for another point in the cola market, Pepsi built the biggest snack empire in the world. Frito-Lay alone does $23 billion a year, half of Coke's sales. PepsiCo's revenue two years ago was $92 billion. Coke's was $47 billion.
What does it teach?
The most famous rivalry in marketing history has been misread by everybody. Being second in cola forced Pepsi to build a different business. Being behind meant it had to find another aisle. Coke won the fight, Pepsi diversified, and that's why one of them is twice the size of the other.
So whenever you lose a fight, ask yourself: should I even be in this?
Coke or Pepsi?
Your take. One tap, then see how everyone else voted.
Quick answers
Who has the bigger cola share?
Coke, with 44% of the US market against Pepsi's 26%.
Why is Pepsi bigger overall?
It bought Frito-Lay in 1965 and built a snack and drinks empire, with revenue of $92 billion against Coke's $47 billion two years ago.
What is the lesson?
Being second forced Pepsi to find a different aisle. When you lose a fight, ask whether you should be in it.
See you on the next one.
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