When looking to cool down after a hard day of work, you may resort to a cold and thrilling beverage that has the perfect taste and gives you the energy to carry out other tasks effectively. You aren’t left with many options if you want nothing but the best. It all boils down to just Coke and Pepsi. Like it or not, these two companies have been on the top of the beverage game, often dethroning each other. Here, let’s know about the market shares of two companies- Coke vs Pepsi.
These two companies have been battling out for over 5 decades. This infamous war is often referred to as the Cola Wars. Some may side with team red, and the others may favor team blue, as consumers all over the world are divided on this one seemingly small issue. The two companies have often made campaigns humorously taking jabs at each other.
There have been highs and lows for both companies, just like their share prices. This article compares Coke and Pepsi’s market share along with some other relevant information.
Coke vs Pepsi Market Share
The war between Coke and Pepsi wasn’t just limited to their advertising or sales, it applied to their share price as well. Coke has been a public company (their shares are being traded in the stock market) for over a century! On the contrary, Pepsi has been public for just two decades.
Coca-Cola Consolidated, trading as (COKE) in the share market, is currently listed at the astonishing price of $392.50. There is a stark difference in price if we compare it to Pepsi’s (PEP in the share market) share price, which is currently trading at $159.18.
The recent downfall of Pepsi coupled with the profits of Coke has skyrocketed their stocks by a huge margin. This explains the price difference between the shares.
History of Coke and its Market Share
We may know about the present status of Coke as a company, but not many are aware of its history and inception. From having ownership issues to being a successful brand, Coke has gained notoriety and success.
Beginning and Initial Recipe
On May 8, 1886, chemist and former Confederate Colonel John Pemberton invented Coca Wine at his Eagle Drug Pharmacy. The source of caffeine in this initial drink came from the African kola nut. After the passing of the probation laws, Pemberton tinkered the drink, inventing what we know as Coca-Cola today. This was the non-alcoholic version of the initial drink. It was sold at just 5 cents a glass, which remained as a norm for 63 years until 1959. It was sold with the claim of curing indigestion, headaches, and even addiction.
Coca-Cola after Pemberton and IPO (Initial Public Offering)
After the sudden unfortunate death of John Pemberton in 1888, Asa Candler took over the company. Candler was one of the highest stakeholders in Coca-Cola. He was also the sole proprietor of the company. His total investment in the company amounted to $2,300 in 1889, which is worth $71,000 today, adjusted in terms of inflation.
A few decades later, in 1919, a group of investors from Delaware purchased Coca-Cola co. for $25 million which amounts to $396 million if adjusted to inflation, a tremendous amount even for those days. The same year, the company’s shares were offered at NYSE (New York Stock Exchange), for $40 per share. A total of 500,000 shares were offered.
Financials of Coke
From $40 in 1919 to close to $400 in 2021, the market price of Coke shares has seen its fair shares of highs and lows. Ever since its inception, the company has operated a franchise distribution system. In 2020, they managed to generate over $37 billion in revenue, with over $10 billion in operating income, $9 billion in net income, $87 billion worth of assets, and $18 billion in equity. They have over 88,000 employees all over the world.
History of Pepsi and its Market Share
After knowing the extensive history of Coke, it’s time to shed light on its equally ferocious rival.
Introduction to Pepsi and its Ingredients
First introduced as “Brad’s Drink” in 1893 by chemist Caleb Bradham, at his drugstore in North Carolina. It was advertised to cure dyspepsia (more commonly known as indigestion today), hence it was renamed Pepsi-Cola in 1898. Pepsi may have also been named after the enzyme pepsin that helps in digestion, though it was never used in the beverage itself.
The original ingredients included sugar and vanilla extract, with aims to boost energy and aid in digestion. After a few years of the average business and Coca-Cola’s market domination, Pepsi incurred large sums of losses, in 1923 it was filed for bankruptcy due to the high prices of sugar during the first World War. Coca-Cola had three opportunities to land the killing blow on Pepsi by buying them, which they did not.
Increase in Popularity
During the great depression, Pepsi was known for selling 12-ounce bottles for 5 cents, while Coca-Cola was selling 6-ounce bottles for the same price. This combined with the famous jingle was successful in increasing the status of Pepsi. In just two years time period, the profits of Pepsi Cola doubled. This skyrocketed their sales.
Initial Public Offering (IPO)
After seeing various ownership changes, along with various innovations and techniques and changes in ingredients along with the famous Cola wars with Coca-Cola, Pepsi decides to go public in 1999, offering $1 billion worth of total shares at $24 per share. The numbers of shares were undisclosed.
The IPO was underwhelming and did not meet the expectations of the shareholders. Some speculate the reason being the aggressive marketing of Coke during the IPO and late IPO itself being the main reasons.
The IPO may be underwhelming for Pepsi but they managed to dish out great advertisements which in turn resulted in more sales.
Final Thoughts
Some speculate that the Cola Wars may go on for decades to come, as both companies have a great sense of marketing and competition. There may be a stark difference in the share price, with Coke leading the charge but there isn’t much disparity between the two soft drink giants, as intense competition is healthy only for the consumers.
