For decades, the “Cola Wars” were simple: Coke vs. Pepsi. But in 2025, the battlefield looks very different. Pepsi, once Coke’s fiercest rival, has slipped to fourth place in U.S. soda sales behind not only Coca-Cola, but also Dr Pepper and Sprite. What happened?
Part of Pepsi’s challenge is strategy. Coca-Cola slimmed down years ago by spinning off its bottling operations, freeing up money and attention for marketing and brand building. Pepsi kept its bottling business in-house and has been weighed down by trucks, warehouses, and complexity. Coke’s sharper focus has paid off: bigger ad budgets, leaner operations, and stronger brand loyalty.
But Pepsi’s decline isn’t just about Coke. Smaller challengers and new products are reshaping the market. Dr Pepper leaned into quirky flavors and TikTok buzz. Sprite reinvented itself with Gen Z-friendly campaigns and a new hit product, Sprite Chill. Meanwhile, health-focused upstarts like Olipop and Poppi are doubling sales with prebiotic sodas marketed as better-for-you alternatives. Even celebrities like Ben Stiller are entering the soda space, banking on nostalgia and personality-driven branding.
For marketers, the lesson is clear. Competition is no longer just “big vs. big.” A strong distribution system matters, but so do brand positioning, innovation, and the ability to connect with consumers’ changing values, whether that’s health, fun, or belonging to a cultural moment. Today’s soda aisle shows how brand strategy, innovation, and cultural relevance decides who wins and who fizzles out.
Discussion Questions and Activities
- How has Coca-Cola’s decision to spin off its bottling operations helped its brand stay strong?
- What factors explain why Dr Pepper and Sprite have overtaken Pepsi in market share?
- How do health-focused startups like Olipop position themselves differently than legacy soda brands like Coke and Pepsi?
- What risks and opportunities come with celebrity-led brands like Stiller’s Soda? Watch Ben Stiller’s ad for his new soda here https://www.youtube.com/watch?v=6WwWg0Hf38Y.
- If you were Pepsi’s CMO, what would you do next to regain market relevance?
- Brand Battle Map. Students create a product perceptual map of major soda brands, plotting them by “traditional vs. health-conscious” and “mass-market vs. niche,” then discuss positioning strategies.
- Ad Campaign Remix. In groups, students redesign a past Pepsi ad campaign to target Gen Z more effectively.
- Startup Pitch. Students role-play as founders of a new soda brand, pitching their product’s positioning, target audience, and marketing strategy to the class.
Sources: Miller, Merlyn (23 Sep 2025), Ben Stiller Is Launching a Soda — and We Got a First Taste, Food and Wine. Wainer, David (12 Sep 2025) If Pepsi Wants to Win, It Has to Play Coke’s Game, Wall Street Journal. Roche, Calum (30 Jul 2025) Pepsi’s free fall to 4th place in the Soda Wars: These 3 soft drinks now top the list in the U.S., Diario, AS. Doering, Christopher (8 Jul 2025) Olipop doubles down on health claims as Pepsi, Coke enter better-for-you soda space, Food Dive.
