Coca-Cola Leans Into a New Market (Pepsi Is Already There)

For decades Coca-Cola (KO) – Get Free Report and PepsiCo (PEP) – Get Free Report have battled about which had the better-tasting cola. That led to the famous “Pepsi Challenge” marketing campaign, which kicked off in 1975 and has been used periodically since then.

The premise was simple. People were asked to sample both Pepsi and Coke in a blind taste test and, at least according to the ads, Pepsi was the overwhelming winner. 

In reality, people swear by one brand over the other, and the “which is better? question is really just  for marketing campaigns and individual tastes.

Coke and Pepsi’s battle for supremacy has spanned all sorts of different soda areas. Both recently changed their “zero sugar” recipes (using the word diet is taboo now). And PepsiCo also recently killed its lemon-lime Sierra Mist brand, replacing it with Starry, a new attempt to dethrone Coke’s Sprite.

In recent years, that battle has extended beyond soda into juice, water, energy drinks, iced teas, and more. That’s largely because soda sales peaked in the U.S. in 1999.

“After peaking in the late 1990s, per-capita soft drink consumption has fallen every year since,’ wrote IbisWorld. “The reasons behind the fall are twofold: an increase in health consciousness and an increase in price. Carbonated soft drinks provide little nutritional value, though many of these drinks provide an entire recommended daily sugar intake in one 12-ounce can.”

That’s one take on the why. In actuality, it’s also possible that consumers just have a lot more choice and they’re opting for other drinks.

Coca-Cola Moves Into Mixers 

Recently, Coke and Pepsi have dipped their toes into alcoholic beverages. That’s an adjacent space where both have opted to work with partners.

In June 2021, PepsiCo launched a new line of nonalcoholic mixers designed to capitalize on the growing craft-cocktail market..

“The premium mixers, called Unmuddled, will hit shelves in September,” Spirit Business reported at the time. “The range comes in three flavor variants, which are made with juice and contain no artificial sweeteners.”

Pepsi’s Unmuddled line includes:

• Lemon Mint, which the company described as ‘cool, zesty, refreshing and light,’ with an herbal note designed to pair with tequila, gin, or whiskey.
• Fiery Pineapple matches its namesake fruit with a spicy kick and is suggested for mixing with vodka, rum, tequila, or mezcal.
• Spiced Mandarin, which is designed to mix ‘seamlessly’ with any spirit, though tequila, gin, or whiskey are recommended

A few months before it launched Unmuddled, PepsiCo released Neon Zebra, another nonalcoholic mixer line.

“They are designed to appeal to younger consumers spending more time at home who want to avoid complicated cocktail recipes or large-format mixers,” RetailDive reported.

Now, Coca-Cola has followed its longtime rival into the craft-cocktail-mixer space.

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