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The caffeine battles, of course, are merely the latest skirmishes in the ancient war between Coke and Pepsi. Coca-Cola, which makes Sprite, Fresca, Mello Yello and other brands in addition to Coke and TAB, leads all soft-drink producers, with some 36% of the total market. Pepsi brands, including Mountain Dew, have about 25%. But although regular Coke is still the bestselling soft drink, it has lost some ground to Pepsi since the early 1970s (see chart).
The battle between the two soft-drink giants is expensive. They will spend at least $500 million on all advertising and promotion this year. Each will account for approximately half that sum.
The newest twist in the war for the taste buds of America is the shift in diet-cola advertising campaigns to appeal to male audiences. "We have found that 40% of our Pepsi Light drinkers were men, even though we never made a point of reaching them," says Joseph Block, PepsiCo vice president. Pepsi has accordingly embarked on a $10 million drive to "reposition" Pepsi Light closer to the men's locker room. One new commercial in fact is shot in a football locker room and features singing and dancing behemoths of the New York Giants defensive unit declaring that they hate opposing halfbacks and quarterbacks and then adding, in unison, "but we love Pepsi Light!"
Coca-Cola has also put together new male-oriented ads. Says a construction worker in one: "At last there is a soft drink that isn't just out for my body." Explains SSC&B's MacDougall: "For about 17 years all of the products in the diet segment were female oriented—the music, everything about them. Men were just allowed to look at those beautiful bodies. But we are changing that."
The next battleground in the soft-drink industry is likely to be over the sweeteners used in diet drinks. Low-calorie sodas, which make up some 20% of the carbonated-beverage market, have been growing at a 10% to 15% annual clip. That delights firms because diet drinks are the most profitable ones they make. Reason: saccharin, used in most diet soft drinks, costs one-tenth as much as sugar. But there is some concern that saccharin in extremely large doses may cause cancer; besides, the sweetener leaves an aftertaste. Firms have been experimenting with other artificial sweeteners. One of them, G.D. Searle & Co.'s aspartame, is more expensive but better tasting and is believed to have no link to cancer. The Food and Drug Administration is expected to rule soon on whether aspartame may be used in soft drinks, and soda firms could quickly start using the sweetener if it is approved. Says Smith Barney's Doyle: "It is absolutely certain in my mind that aspartame will be used. It's just a question of when."
While some analysts and soft-drink executives fear the explosion of new products will mean market confusion and heavier competition, others believe it will mean larger overall sales. One such enthusiast is Coca-Cola Chairman Roberto Goizueta. Says he: "Even with the multitude of products already on the market, if we expect to keep growing and satisfying the consumer we'll have to create still more. We must create more new flavors, more diet drinks, more caffeine-free ones and even new products that contain caffeine, if consumers continue to want them."