How Pepsi Can Finally Unseat Coke As The World’s Most Valuable Soft Drink Brand

As Pepsi and Coke engage in an epic struggle to dominate the most significant growth segment of the soda market, they take aim at a common enemy.

The outcome depends on which cola nation wins the race to produce soda that rivals the taste of their flagship products without sugar. 

Winning Young Hearts And Minds

Hanging in the balance is the brand loyalty of Gen Z and millennials who will shift their market share to the best-tasting zero-sugar alternative.

That said, the art of war in marketing is less about producing the best product and more about changing perceptions. Taste is subjective and can be influenced by the opinions and preferences of our peers.

The next iteration of the cola wars will depend on which brand makes the strongest case for its zero-sugar offering in the media.

This fiercely contested theatre of war is arguably the most viable opportunity for Pepsi to knock Coke off its perch as the world’s most-valued soft drink brand since both brands were launched in the 1800s.

Diet Is A Dirty Word

With the “diet” positioning being annihilated by younger generations who associate it with restriction and deprivation, “zero sugar” is now synonymous with the healthy and sustainable lifestyle changes they crave.

The soda manufacturers are scrambling to rebrand their products as “zero sugar,” accelerating production of the new category while gradually reducing the presence of their diet sodas on store shelves without alienating aging baby boomers who are still diehard diet Cola fans.

The Market Leader Could Be In Trouble 

Per Beverage Digest, Pepsi Zero Sugar has an early lead, outgrowing Coke Zero Sugar in the first half of 2023, boosting share by 22%, beating Coke Zero Sugar’s 13% uptick by 70%.

Some of that momentum can be attributed to product development as Pepsi’s new Zero Sugar recipe relies on a  new sweetener “system,” which is likely a proprietary blend of multiple sweeteners.

But playing an equally important role in its popularity is its clever positioning that the new formula gives the cola a “more refreshing and bolder taste profile.”

Social Proof for Pepsi

This statement was validated by users on Reddit who spread the message like wildfire in the Summer of 2023, saying the new version tastes “way sweeter” and no longer has a “weird aftertaste.” That’s vaguely amusing because it was a backhanded compliment. At the same time, the authenticity of the message is bulletproof.

Coca-Cola fired back with a radically revamped version of Coke Zero Sugar, featuring new packaging to rebrand its new secret formula.

The market leader in the global non-alcoholic beverage industry since 2004, Coca-Cola is still the world’s most valued soft drink brand at $33 billion with PepsiCo weighing in as a distant number two at $18 billion and change.

But if the challenger’s messaging and formula resonate more with Gen Z and millennials, Pepsi could be the architect of the most disruptive market share shift in history.

SWOT Report is now Business Intelligence Weekly. The creator and journalist behind the digital publication, Andrew Ellenberg, is President & Managing Partner of Rise Integrated, an innovative studio that creates, produces, and distributes original multimedia content across digital touchpoints. To submit story ideas or ask about custom multimedia publishing, call 816-506-1257, email [email protected], or read more of his work in Forbes. To learn about his company check out this profile story.