Coke and Pepsi as Industry Leaders 2
Table 2: Domestic Soft Drink Market 13
The Beverage Industry: Coke vs. Pepsi
Just before the turn of the century, prospective soft drinks were being formulated by southern pharmacists, with an eye towards relieving indigestion (Hoover's, 1995). From the first decade of the twentieth century until the 1960s, the competition in the beverage industry was primarily between equals; Coca Cola fought it out with Pepsi Cola for market share, and juice or coffee companies competed with each other.
In the 1960s, the competitive edge in the beverage industry went to Coca Cola, with its purchase of Minute Maid in 1960, the introduction of Sprite in 1961, and the introduction of Tab in 1963 (Hoover's, 1995). Pepsi Cola, with a similar stable of soft drinks, became a key player in the fast food industry with the acquisition of Frito-Lay in 1965, Pizza Hut in 1977, Taco Bell in 1978, and Kentucky Fried Chicken in 1986 (Hoover's, 1995).
Less powerful entrants in the beverage industry have had an effect on defining exactly what a beverage company is. Quaker's Gatorade and Snapple, once the leaders in sports drinks and New Age drinks, have recently been met by stiff competition from Coke and Pepsi, respectively with Powerade and Allsport, Fruitopia and Drenchers ("Irascible cola...," 1995). The addition of iced teas to the product lines of Coke, Pepsi, and Cadbury, has redefined cola companies as total beverage companies ("Cola domination...," 1994).
However, as the beverage industry expands its product line, two things remain the same: Soft drinks still lead sales, and Coke still leads Pepsi ("Irascible cola...," 1995).
Remarkably enough, the two leaders in market share and product line, started their climb towards market dominance within 12 years and 500 miles of each other. Coca Cola was originally formulated by Atlanta pharmacist John S. Pemberton in 1886, and in 1898 pharmacist...