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Marketplace Morning Report

Diet Coke beats Pepsi

Jennifer Collins Mar 17, 2011
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Kai Ryssdal: Coke and Pepsi have been battling it out for supremacy in the soft drink world for years now. Decades, truth be told. Pepsi’s been a consistent number two, and seems to have gotten pretty well used to it.

But consumers — as they tend to do — have shaken things up. A report out today shows that Diet Coke is now the second-best selling soft drink in America. Marketplace’s Jennifer Collins takes a look at what a difference a place makes.


Jennifer Collins: So I asked around the office: Diet Coke or Pepsi? And by and large, the answer was:

Montage: Diet Coke. Diet Coke. Always Diet Coke.

The “Always Diet Coke Club” has been on a roll. Americans bought 35 million more cases of Diet Coke than Pepsi last year, according to a report today in Beverage Digest (PDF). John Sicher is the editor.

John Sicher: Pepsi got a bit of a wake up call from this data.

The soft drink market has been shrinking for years. But Gary Hemphill of Beverage Marketing Corporation says when they do buy soda:

Hemphill: People in general want fewer calories. That’s the way the market is moving, toward healthier refreshment.

Thing is, Diet Pepsi sales also declined as the company steered ad dollars into social campaigns like the Pepsi Refresh Project. David Silver is an analyst with Wall Street Strategies.

David Silver: That type of advertising and that type of marketing is not what sells beverages. I think Pepsi’s learning that right now.

He says if Coke and Diet Coke continue to lengthen their lead:

Silver: Then you may see them have economies of scale where they’ll be able to lower prices where they’ll have more market share.

But more likely he says Pepsi will come back swinging, with ads like this one.

Pepsi commercial: Pepsi Max: zero calories, maximum taste.

In other words, the Cola Wars are far from over.

I’m Jennifer Collins for Marketplace.

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