Soda Wars: An effervescent rivalry

An in-depth look at the two most valuable soda brands in the marketplace

These two old rivals have managed to introduce their peculiar flavors as an accompaniment to almost any food in the world, becoming cultural icons that are present at every moment. With their beginnings as medicines, both companies evolved their product to bring it to as many consumers as possible, made from water, sugars (from cane to Stevia) and flavorings such as caramel, cinnamon and lemon. It is the combination of these ingredients that result in the peculiar and iconic "cola" flavor.

Coca-Cola vs. Pepsi Advertising Impact

Its constant evolution comes hand in hand with factors such as innovation, versatility and loyalty. However, the greatest impact is a result of their marketing campaigns, in theaters, on the streets and on the networks, both companies devote a large part of their spending to advertising, for example, in 2022 alone, Coca-Cola allocated $4,319 Million to this activity, this represents 31% of the company's total operating expenses while Pepsi only 10%.

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In the same way, most of the time it is important to pay attention to qualitative data, those different and difficult to quantify things that companies do to stand out and go from being a simple occasional consumer good to a cultural symbol. In addition, a company's commitment to go the extra mile, to not only offer a good product, but to operate in a sustainable and fair manner are criteria that investors no longer overlook, and while both companies have room for improvement, it is Pepsi with an overall ESG rating of 5.28 that slightly outperforms Coca-Cola's 5.16.

ESG criteria

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Another aspect we should highlight is the importance of people's participation within a company, after all, without employees, who would collect, process and distribute resources? Despite their very similar market capitalizations, Coca-Cola has 82,500 employees, while Pepsi employs 315,000 people around the world, which explains the difference in operating expenses.

Behind the success of Coca Cola Vs Pepsi

Due to the growing public interest in opting for a healthier lifestyle, these brands have decided to invest in research and development to adapt to the times. To this end, they have substituted their sweeteners to reduce calories with the minimum sacrifice to taste, which means that even the most demanding consumers can find something that satisfies them. In this way, they have succeeded in building customer loyalty across all generations.

Both are so valuable because they have managed, for more than 120 years, to remain relevant, increasing their presence in the lives of millions of people around the world.

However, a couple of questions arise as to how much of an impact it has made. For example: What would have been the result if you had invested $1,000 in stocks a few years ago? The answer is in the graph below.

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