This Major Soda Brand Is Losing Market Share Fast
Pepsi and Coca-Cola used to be the two major rivals duking it out for market share in the U.S. and across the globe, but now Pepsi is being edged out by contenders to the crown (note: Pepsi the specific drink, not the entire Pepsi portfolio). Once holding steady at number two, Pepsi is not longer in the top three sodas, but the company is determined to turn things around. Here’s why Pepsi is slipping, and which sodas are pushing ahead.
Dethroned By Dr Pepper
Pepsi lost the runner-up spot to Dr Pepper in a shock upset in 2024. While “Dr Pepper has been gaining, [Pepsi] has been declining, and they’re meeting in the middle,” Duane Stanford, editor of Beverage Digest, told CNN. “Dr Pepper has distinguished itself through effective marketing campaigns that emphasize its unique flavor and individuality,” Andrew Dickow, managing director of Greenwich Capital Group and national leader of its food and beverage practice, told Food Institute.
Sprite Joins the Fight
Being knocked out of second place by Dr Pepper was bad enough, but Sprite recently knocked Pepsi out of the number three spot, leaving the soda giant at number four. “Sprite does have this momentum that we’re building on,” Josh Kroo, vice president of sparkling flavors in Coca-Cola’s North American operating unit, tells Marketing Dive. “We are planning to continue to invest more behind it, because we think it will play a super important role in the future of the total portfolio.”
Costco Replacement
Costco is rolling out Coca-Cola across food courts nationwide, ending its relationship with Pepsi after 12 years of collaboration. “We have a newly opened store which has Coke, and all the others surrounding it are still on Pepsi. The turf wars are real!” one Costco shopper said. “I bought one at #1717 in Stuart, Florida. It was awful. They need a McDonald’s employee to come and train them,” another commented.
Cutting Back on Snacks
Americans are cutting back on snacks, which is impacting Pepsico profits. “PepsiCo’s latest earnings report reflects the effects of consumers becoming more cautious with their discretionary spending,” Jonathan Zhang, an associate professor of marketing in the Colorado State University College of Business, told Newsweek. “At the macro, cultural level, changing consumer preferences and food choice cultures are also playing a role. There’s been a growing cultural emphasis on health and wellness, which is reflected in trends like the rise of protein-based beverages and functional foods.”
Adjusting Strategy
PepsiCo is focusing on making changes to align with consumer demand, like removing artificial food colorings from products like Lays and Tostitos by the end of 2025. “In the near term, we should expect companies in the snack and beverage sector to adjust their strategies—whether through pricing, promotions, or product innovation—to align with these evolving consumer behaviors towards healthier alternatives,” Zhang said.
