Coke vs. Pepsi: The cola wars are back

Coke and Pepsi are both expanding their product lineups and increasing their ad spending to attract more consumers. Here's why the new cola wars are less about Coca-Cola vs. Pepsi and more about sparkling water and tea.

Posted: Apr 27, 2018 1:52 PM
Updated: Apr 27, 2018 1:54 PM

Get ready for a new round of cola wars! Or shall we say tea, water and organic beverage wars?

Pepsi reported its latest results Thursday. And even though it acknowledged "challenges" in its US soda business, Pepsi posted solid sales growth in North America from Lipton and Pure Leaf, LifeWTR and Kevita kombucha and probiotic cleansing drinks.

The company also posted strong gains in beverage sales from China, India, Brazil and other international markets and an increase in revenue from its Frito-Lay snack business, which owns Doritos, as well as its Quaker brand of oatmeal and cereal.

All that added up to a stellar quarter for Pepsi, which reported sales and profits that topped Wall Street's forecasts. The stock rose nearly 1% on the news.

Pepsi's results come just two days after its top rival Coca-Cola also reported better-than-expected sales and profit, led by the fist increase in volume from the Diet Coke brand in North America in more than seven years.

Coke recently rolled out four new Diet Coke flavors that it clearly was targeting to Millennials -- things like Ginger Lime and Feisty Cherry.

Related: Diet Coke's new flavors are a big hit

So how will Pepsi respond to Coke's newfound Diet Coke success? Chief financial officer Hugh Johnston said in an interview with CNNMoney that Pepsi is also working on "some things with flavors" for the core Pepsi brands, which he described as a "work in progress."

But Johnston said its "innovation strategy" -- working to develop more non-soda drinks -- is paying off too. He pointed to the launch of the company's new bubly brand of sparkling water, for example.

The sparkling water category is red hot thanks to the success of the LaCroix brand that's owned by National Beverage. Coke is trying to gain a foothold in this market too. It recently bought the US rights to Mexico's Topo Chico band.

Pepsi also recently unveiled Tropicana Coco Blends, pineapple and peach passion fruit drinks that also have coconut water. There's also a new line of organic Tropicana juices for kids that have no added sweeteners or artificial flavors.

But Johnston added that other core Pepsi beverages are getting a new push as well. He said the company has particularly high hopes for its new Gatorade Zero, a version of the sports hydration drink that has no carbohydrates.

"Gatorade Zero is going to be a big winner," Johnston said.

Pepsi also just rolled out Mtn Dew Ice, a clear lemon-lime flavor. Pepsi promoted it in a Super Bowl ad with Morgan Freeman and Missy Elliott that paired with a new ad for Doritos Blaze starring Peter Dinklage of "Game of Thrones" and Busta Rhymes.

Related: How fruit juice got boxed out of the health craze

Johnston said Pepsi increased its ad budget in the first quarter, and he noted that Coke did as well. That trend should continue. Pepsi is looking to spend more on marketing for both its soda brands as well as non-carbonated beverages like tea.

And Pepsi is doing so more online as well. Johnston said 30% of the company's ad spending is now on digital platforms. That percentage has gone up steadily over the past few years and should keep doing so.

So the Coke vs. Pepsi war is definitely back on. But it's now playing out on Google, YouTube, Facebook and Instagram as well as TV.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 735999

Reported Deaths: 13486
CountyCasesDeaths
Marion1007151752
Lake54249977
Allen40946680
St. Joseph36335553
Hamilton35829408
Elkhart28844443
Tippecanoe22475219
Vanderburgh22367397
Porter18946311
Johnson18067381
Hendricks17317315
Clark13036192
Madison12762339
Vigo12501249
LaPorte12086215
Monroe11957172
Delaware10755187
Howard10001218
Kosciusko9466117
Hancock8373142
Bartholomew8098156
Warrick7799155
Floyd7690178
Grant7098174
Wayne7072199
Boone6745101
Morgan6611140
Dubois6166117
Marshall6111112
Cass5876105
Dearborn583178
Henry5785105
Noble565984
Jackson503773
Shelby494396
Lawrence4602120
Gibson437192
Harrison436672
DeKalb430585
Clinton428453
Montgomery425889
Whitley398739
Huntington394480
Steuben391057
Miami383968
Knox372890
Jasper372649
Putnam363760
Wabash355380
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Ripley340770
Jefferson331881
White317754
Daviess298399
Wells292081
Decatur285992
Fayette282162
Greene280585
Posey272034
LaGrange268970
Scott267554
Clay261347
Washington242132
Randolph242081
Spencer232931
Jennings230949
Starke219354
Fountain213946
Sullivan212242
Owen203356
Jay197830
Fulton196040
Carroll190420
Orange184754
Perry184637
Rush174025
Vermillion170044
Franklin168535
Tipton163445
Parke146716
Pike135634
Blackford135132
Pulaski117445
Newton108934
Brown102641
Crawford101415
Benton99014
Martin89515
Warren82615
Switzerland7948
Union71410
Ohio57111
Unassigned0417

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1091623

Reported Deaths: 19528
CountyCasesDeaths
Franklin1268061406
Cuyahoga1132982134
Hamilton804211211
Montgomery518231015
Summit47606955
Lucas42618792
Butler38548585
Stark32661909
Lorain25199486
Warren24390300
Mahoning21795588
Lake20846371
Clermont19880240
Delaware18608133
Licking16488212
Fairfield16327200
Trumbull16196468
Medina15379266
Greene15143244
Clark14096299
Wood13168189
Portage12966206
Allen11740232
Richland11433199
Miami10713220
Wayne8923214
Columbiana8881229
Muskingum8831133
Pickaway8596121
Marion8561136
Tuscarawas8509245
Erie7958155
Hancock6944128
Ashtabula6904172
Ross6876156
Geauga6741148
Scioto6444102
Belmont5978168
Union575448
Lawrence5590102
Jefferson5583151
Huron5462120
Sandusky5380122
Darke5374126
Seneca5311122
Washington5228109
Athens520858
Auglaize494986
Mercer481585
Shelby470293
Knox4513110
Madison439363
Putnam4301101
Ashland426590
Fulton426469
Defiance424697
Crawford3993107
Brown397557
Logan383276
Preble381398
Clinton374163
Ottawa369081
Highland356862
Williams343475
Champaign335358
Guernsey317653
Jackson314152
Perry295950
Morrow287239
Fayette283550
Hardin271964
Henry270366
Coshocton266157
Holmes2625101
Van Wert244263
Adams240053
Pike238634
Gallia236749
Wyandot232155
Hocking216462
Carroll192448
Paulding174340
Meigs145540
Noble134137
Monroe132542
Harrison109637
Morgan108823
Vinton84915
Unassigned02
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