Cola Wars Continue: Coke and Pepsi in 2010

For more than a century, Coke and Pepsi vied for "throat share of the world's beverage market.
The most intense battles in the so-called cola wars were fought over the $74 billion carbonated soft
drink (CSD) industry in the United States. In a "carefully waged competitive struggle" that lasted
from 1975 through the mid-1990s, both Coke and archieved average annual revenue growth of around
10%, as both U.S. and worldwide CSD consumption rose steadily year after. According to Roger Enrico,
former CEO of Pepsi:

The warfare must be perceived as a continuing battle without blood. Without Coke, Pepsi would have a
tough time being an original and lively competitor. The more successful they are, the sharper we have to
be. If the Coca-Cola Company didn't exist, we'd pray for someone to invent them. And on the other
side of the fence, Im sure the folks at Coke would say that nothing contributes as much to the
present-day success of the Coca-Cola Company thanPepsi

That relationship began to fray in the early 2000s, however, as U.S. per-capita CSD consumption
started to decline. By 2009, the average American drank 46 gallons of CSDs per year, the lowest CSD
consumption level since 1989. At the same time, the two companies experienced their own distinct ups
and downs; Coke suffered several operational setbacks while Pepsi charted a new, aggressive course in
alternative beverages and snack acquisitions.

As the cola wars continued into the 21st century, Coke and Pepsi faced new challenges: Could they
boost flagging domestic CSD sales? How could they compete in the growing non-CSD category that
demanded different bottling, pricing, and brand strategies? What had to be done to ensure
sustainable growth and profitability?

Economics of the U.S. CSD Industry
Americans consumed 23 gallons of CSDs annually in 1970, and consumption grew by an average of 3%
per year over the next three decades (see Exhibit 1). Fueling this growth were the increasing availability
of CSDs and the introduction of diet and flavored varieties. Declining real (inflation-adjusted) prices
that made CSDs more affordable played a significant role as well. There were many

Cola Wars Continue : Coke y Pepsi en 2010
Durante ms de un siglo , Coca-Cola y Pepsi se disputaban el "compartir la garganta " del
mercado de bebidas del mundo .
Las batallas ms intensas en las llamadas guerras de la cola se peleaban por la industria de $ 74
mil millones de bebidas carbonatadas (CSD ) en los Estados Unidos. En una " lucha competitiva
cuidadosamente librada " que dur desde 1975 hasta mediados de la dcada de 1990 , tanto
Coca-Cola y archieved crecimiento de los ingresos anuales promedio de alrededor del 10 % , ya
que el consumo CSD tanto de los EE.UU. y en todo el mundo aument de manera constante
ao tras . Segn Roger Enrico , ex CEO de Pepsi:

La guerra debe ser percibida como una continua batalla sin sangre. Sin Coke , Pepsi tendra un
momento difcil de ser un competidor original y animado . Cuanto ms xito tengan , ms
ntida que tenemos que ser . Si la Coca- Cola Company no existiera , tendramos oramos por
alguien que inventarlos . Y en el otro lado de la cerca , estoy seguro de que la gente de Coca-
Cola diran que nada contribuye tanto al xito actual de la Compaa Coca -Cola a Pepsi ...

Esa relacin comenz a deshilacharse en la dcada de 2000 , sin embargo, como el consumo
de EE.UU. CSD per cpita comenz a declinar. En 2009 , el estadounidense promedio bebi 46
litros de bebidas refrescantes con gas por ao, el nivel de consumo ms bajo desde 1989 CSD .
Al mismo tiempo , las dos empresas experimentaron sus propios ups diferentes y bajas ; Coke
sufri varios reveses operativos mientras Pepsi traz un nuevo curso agresivo de bebidas
alternativas y adquisiciones de aperitivos.

Como las guerras de la cola continuaron en el siglo 21 , Coca-Cola y Pepsi se enfrentan a
nuevos retos : Podran aumentar dbiles ventas domsticas de la CDS ? Cmo iban a
competir en la creciente categora de no - CSD que exiga diferente embotellado , los precios y
las estrategias de marca ? Lo que haba que hacer para asegurar el crecimiento sostenible y la
rentabilidad?

Economa de la Industria CSD EE.UU.
Los estadounidenses consumieron 23 litros de bebidas refrescantes con gas al ao en 1970 , y
el consumo creci en un promedio de 3 % anual durante las prximas tres dcadas ( ver Anexo
1 ) . Que alimentan este crecimiento fueron el aumento de la disponibilidad de los DCV y la
introduccin de la dieta y las variedades de sabores. La disminucin de los precios reales (
ajustados a la inflacin ) que hicieron los DCV ms asequible jugaron un papel importante
tambin. Haba muchos