Wednesday, August 23, 2006

Pepsi and Coke go head to head over fizz-free drinks

Yesterday's L.A. Times business section had a nice article ("Coca-Cola Seeks More Fizz with Non Soda Lines") on the fight between Coke and Pepsi for the non-cola market share. It's really astonishing to me that the two companies own so much of the beverage market. Coke makes Dasani water, Powerade, Minute Maid drinks, Godiva drinks, Tab, and I believe they also do the Starbucks bottled drinks. Pepsi provides pictures so I don't have to list their products, and Aquafina water. Did you know that Pepsi only gets 20% of their sales from soda? Wow. They should have an easier time filling up those vending machines at schools...oops, except, they do their biggest secondary business from Gatorade. Gatorade is fine if you're running a marathon, but not if you're an overweight second grader. Meanwhile, they have Tropicana. Coke depends on soft drinks quite a bit more at the moment. Are you aware of who bottles what you buy?

For example, when you go into a restaurant, they are usually a Coke or Pepsi establishment, but I've yet to see one that's both. Taco Bell: Pepsi. McDonald's: Coke. Baja Fresh: Pepsi. So if you want Lipton Iced Tea at a restaurant, and you can get it, that's a Pepsi place. Minute Maid lemonade? A Coke establishment. I was astonished when I realized that the cola wars run this deep.

At Target, it's either a Coke week or a Pepsi week. They end-cap (big display at the end of the aisles) pallets of one or the other, and one week it's a 12 pack of Pepsi for $3.00 (and the other end of the aisle has an endcap with a pallet of Aquafina) or it's Coke with Dasani on the other end. Also, as is pointed out in the L.A. Times, Pepsi has brilliantly branded Gatorade with so many flavors and variations that it dominates the sport drink spot, leaving Powerade a tiny strip. I thought Powerade was a version of Gatorade (but it's owned by Coke).

If I were richer (Lord knows I'm geeky enough), I'd be headed to InterBev 2006, ("Everything Beverage, Better Than Ever!") in Vegas, where they'll be having the Beverage World Soft Drink Hall of Fame Awards Reception and discussions will include "The Buzz on Benzene: Where We've Been and Where We're Going." If you haven't heard the buzz on benzene, it's that the sodium benzoate and ascorbic acid (vitamin C) in most soft drinks apparently react to form benzene -- a known carcinogen -- in amounts higher than the government allows in water (and therefore, a bit more than should be in a drink. Like we need any). In case you are rich, they also feature panels on what America drinks and sweeteners in drinks. Or, you could spend your money on sending me. Whatever.

Both companies are currently after the middle aged lady market and I would know because I are one. They are both developing drinks perceived as "healthier" using tea extracts, fizz, juice -- whatever they can come up with. We'll see how they do.


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