CALL them decaffeinated or diet, new or classic, the world is increasingly awash in soft drinks.
Americans already gulp 52 gallons of soft drinks a year on a per capita basis, well ahead of every other nation. And they are consuming more each year. Residents of nations such as France, Russia, China, India, and South Africa may not yet swig as much. But US soft-drink giants are scrambling to put more fizz into global guzzling habits.
Some wags refer to the current market-share shoot-out as "Soda Wars." At the least, it is a "more than spirited competition," says John Sicher, publisher and editor of Beverage Digest, an industry newsletter in Old Greenwich, Conn.
"Both Coke [Coca-Cola] and Pepsi are trying to grow at a rate faster than the industry itself," and that is resulting in some elbowing in terms of access to retail shelf space, says Andrew Conway, an analyst for Morgan Stanley & Co. in New York.
The soda wars are occurring on at least four fronts:
Hundreds of millions of dollars are going into new advertising campaigns.
Sodamakers are nudging each other for slots on retail aisles.
The companies are rolling out new products.
Administrative changes are under way at several top beverage firms.
The ultimate objective is to boost sales in the US and abroad.
"The consumption of soft drinks is growing just about everywhere, and will continue to do so," Mr. Sicher says.
In the US, for example, industry data show sodas are now the drinks of first choice, according to Sicher, followed by beer, coffee, milk, bottled water, juices, and tea. Traditional beverage patterns are changing. In 1995, for example, both coffee and tea lost market share. Soft drink sales rose, in part as a result of heavy consumption by Americans under 30. The growth of decaffeinated sodas took a pause.
This year, both Pepsico Inc. and Coca-Cola Company have unleashed massive ad campaigns: Coke is promoting its "official" linkage to the coming Olympic games in Atlanta. Pepsi is promoting "Project Blue," featuring a new blue-colored Pepsi can overseas, to boost sales in Europe and third-world nations. Pepsi is also launching another campaign, Pepsi "Stuff," in which buyers collect "points" that are redeemed for items such as clothing and sunglasses.
Last year, Royal Crown Company launched a new ad campaign to boost market share. RC, owned by Triarc Companies Inc., New York, is the fourth-largest US soda company.
Together, Coke and Pepsi dominate the US soft-drink market, with 73 percent of sales (42 percent for Coke, 32 for Pepsi). Much of Coke's clout comes from its presence at fast-food chains such as McDonald's, Burger King, and Wendy's. At the grocery check-out stand, the two rivals are about neck and neck.
The big battleground is abroad. Coke, which gets most of its earnings from abroad, dominates international markets. But Pepsi is determined to make gains. Pepsi claims to be out front in some key markets, such as China.
Analysts attribute Pepsi's fresh advertising focus to a management change at the top. Pepsico's new chief executive officer, Roger Enrico, is considered a marketing genius. Several years back he boosted domestic Pepsi sales through the Michael Jackson/Madonna ad campaigns. And as head of Pepsico's Pizza Hut chain, he helped sales soar for new Stuffed Crust Pizza and Tripledecker products - in part through ads using unusual sponsors such as Donald and Ivana Trump.
Drinkmakers, for all their happy advertising jingles, are also not above playing hardball, experts say. Ask Dr. Pepper/Cadbury North America, the No. 3 distributor of soft drinks in the US. Owned by London-based Cadbury Schweppes PLC, the firm markets brands such as 7-Up, Crush, Sunkist, Welch's, and A & W Root Beer. Last month Coca-Cola Enterprises Inc. (CCE), the largest bottling distributor in the US, said it was dropping distribution of several smaller Dr. Pepper/Cadbury brands by mid-June. The bottler, 43 percent owned by the Coca-Cola Company, did not drop the Dr. Pepper brand itself. But the move comes just ahead of the important summer vacation season, when beverage sales soar. Other Coke bottlers are expected to follow CCE's lead and drop lower-selling Cadbury products. About 30 percent of Dr. Pepper/Cadbury beverages are distributed by Coke bottlers.