Coca-Cola Vs. Pepsi: Who Has The Best Business Model?

ElementsCoca-ColaPepsiSimilaritiesDifferencesCompetitive Advantage
Customer SegmentsGlobal consumers, restaurants, retailersGlobal consumers, restaurants, retailersBoth target global consumers and have strong partnerships with restaurants and retailers.Coca-Cola has a broader portfolio of beverage brands, including non-carbonated drinks. PepsiCo includes a diverse range of snacks and food products in addition to beverages.Extensive brand recognition and global presence (Both).
Value PropositionRefreshing, iconic beverage brands, emotional appealRefreshing, iconic beverage brands, diverse portfolioBoth provide refreshing, iconic beverage brands with emotional appeal. Coca-Cola offers a wide range of carbonated and non-carbonated drinks. PepsiCo combines beverages with a diverse portfolio of snacks and food products.Coca-Cola emphasizes its beverage brands and their emotional connection with consumers. PepsiCo positions itself as a diversified food and beverage company with a broader product range, including snacks and foods.Wide beverage portfolio and emotional appeal (Both).
ChannelsDistributors, retail stores, vending machinesDistributors, retail stores, vending machinesBoth use similar channels such as distributors, retail stores, and vending machines to reach consumers.Coca-Cola focuses more on the distribution and sale of beverages through partnerships with restaurants and retailers. PepsiCo extends its presence into snack and food aisles, utilizing its diversified product portfolio.Extensive distribution networks (Both).
Customer RelationshipsBrand loyalty, marketing campaigns, customer serviceBrand loyalty, marketing campaigns, customer serviceBoth build customer relationships through brand loyalty, marketing campaigns, and customer service efforts.Coca-Cola’s primary focus is on beverage-related customer relationships. PepsiCo maintains relationships in both the beverage and snack/food segments.Strong brand loyalty and marketing (Both).
Key ActivitiesBeverage production, marketing, brand managementBeverage production, marketing, brand managementBoth engage in beverage production, marketing, and brand management.Coca-Cola primarily focuses on beverage-related activities. PepsiCo engages in both beverage and snack/food production, marketing, and brand management.Beverage specialization (Coca-Cola). Diversified portfolio (PepsiCo).
Key ResourcesBeverage brands, production facilitiesBeverage brands, production facilitiesBoth rely on key resources such as iconic beverage brands and production facilities.Coca-Cola’s key resources are concentrated on beverage brands and related production. PepsiCo’s resources are diversified to include beverage, snack, and food brands, along with production facilities.Iconic beverage brands (Both).
Key PartnershipsBottling partners, distribution networksBottling partners, distribution networksBoth collaborate with bottling partners and utilize distribution networks to ensure global reach.Coca-Cola maintains strong partnerships with bottlers and distributors for its beverage products. PepsiCo extends these partnerships to include snacks and food products in addition to beverages.Well-established bottling partnerships (Both).
Revenue StreamsBeverage sales, licensing, advertisingBeverage sales, licensing, advertisingBoth generate revenue primarily from beverage sales, licensing of brands, and advertising.Coca-Cola derives most of its revenue from beverage sales, while PepsiCo generates revenue from a diversified product portfolio that includes beverages, snacks, and foods.Diversified revenue streams (PepsiCo).
Cost StructureProduction costs, marketing expensesProduction costs, marketing expensesBoth incur costs related to production, marketing, and distribution.Coca-Cola’s cost structure is primarily associated with beverage production and marketing. PepsiCo’s cost structure is more complex due to its diversified product range, encompassing beverages, snacks, and foods.Beverage-focused cost structure (Coca-Cola).

Coca-Cola generated over $43 billion in revenue, compared to PepsiCo’s over $86 billion in 2022. 

PepsiCo has its primary operations in the US. Coca-Cola is the largest beverage company in the world. PepsiCo got diversified between beverages and food, where food represented 53% of its revenues in 2017.

Both companies have massive distribution strategies, and nonetheless the size, they have a relatively quick decision-making process.

That is critical as both companies top into consumer habits. Therefore, they need to be fast in adapting to them. Both companies also spend massive resources on demand generation via marketing activities.

Why do Coke and Pepsi have different business models

At first sight, Coca-Cola and Pepsi might seem to have a business model which not only is similar but, in a way, compete with each other.

While this is true, it is also true that those companies have two different business model and a portfolio of products that, in many cases, doesn’t overall.

Indeed, we’ll see why and in which respect the Coca-Cola Company and PepsiCo business model are similar and where they differ.

Product: where Coca-Cola is about beverages, PepsiCo is quite diversified 

One aspect in which Coca-Cola and PepsiCo differ quite a lot in their product offering. While Coca-Cola is primarily about beverages, PepsiCo is about food and drink.

Coca-Cola generated over $43 billion in revenue in 2022 and over $9.5 billion in net profits.




Coca-Cola Portfolio: from Coca-Cola Annual Report


PepsiCo Portfolio: from PepsiCo Annual Report

Thus, while Coca-Cola is the largest beverage company in the world, PepsiCo has a vast array of products ranging from food and beverage.


If you look at the mix of revenues of PepsiCo, food represented 53%, while beverage represented 47%.

Therefore, where in the minds of consumers Coke and Pepsi might be perceived as direct competitors, if we look at their business models, those look entirely different regarding product offerings and mix.

Where Coca-Cola is a beverage company, PepsiCo draws its strength from offering snacks, complimentary to soft drinks.






This, in a way, allows PepsiCo to compete with Coca-Cola at a better level. Imagine the scenario of a consumer buying a Coke and a packet of Lay’s potatoes.

Organizational structure: both are large yet efficient

When companies get too big, the risk is that they also get too slow in making a decision. However, for companies, like Coca-Cola and PepsiCo, which focus on the consumer markets, it is critical to have a lean decision-making process, where layers of management need to be avoided.

Indeed, where the two companies are too slow to adapt to consumer changing habits, this would kill the business model in the long run.

For instance, both Coca-Cola and PepsiCo, as more consumers perceive their products as unhealthy, they are focusing on diversifying their product portfolio to have more “healthy” choices.


 PepsiCo’s change in portfolio composition 

Distribution strategy: both Coca-Cola and PepsiCo distribution systems are their key advantage

One of Coca-Cola’s key ingredients is its distribution system of branded beverages available to consumers in more than 200 countries through a network of company-owned or controlled bottling and distribution operations, independent bottling partners, distributors, wholesalers, and retailers.

Coca-Cola has the world’s most extensive beverage distribution system.

Also, PepsiCo has a massive distribution system based on manufacturing and licensing agreements with several brands.

Both companies know how to tap into consumer habits 

Demand creation is crucial for any company that wants to access consumer desires.

However, that requires massive marketing resources and campaigns to “enhance consumer awareness,” which means generating demands for their product portfolio.

Coca-Cola spent over six billion dollars in 2017 on promotional and marketing programs. PepsiCo marketing activities amounted to over four billion dollars. 

This process requires a rigorous brand positioning developed around consumer insights.

Coca-Cola franchise leadership

Coca-Cola bottling partners are a crucial ingredient in its success. Coca-Cola also designs business models in specific markets to have maximum penetration.

PepsiCo digital strategy

PepsiCo is putting a massive effort into a digital strategy to grow its brands. Some of those initiatives include, as reported in PepsiCo’s financial statements:

  • Frito-Lay North America is using Big Data to help make sure consumers can help find their favorite snacks in local stores
  • In India, PepsiCo set up a Digital Command Center to analyze links between consumer behavior and business results
  • In China, we leveraged social media to launch the latest “Bring Happiness Home” Chinese New Year campaign, including a 20-minute video that generated more than 1 billion views.

Those are some examples of how PepsiCo is doubling down on those initiatives.

Who has the best business model?

In my opinion, and that is an aspect I like the most about any business model, I like the fact that PepsiCo has a well-diversified portfolio between beverage and food.

This allows the company to tap into larger consumer pieces of the market while successfully competing with Coca-Cola on a larger scale.

Where a consumer might prefer Coca-Cola beverages over PepsiCo, the company can still leverage its large snack portfolio to tap into the same market segments.

PepsiCo is swiftly moving toward “more healthy” choices and digitalization by leveraging organic business growth.

Key Highlights

  • Revenue Comparison: In 2022, Coca-Cola generated over $43 billion in revenue, while PepsiCo’s revenue surpassed $86 billion.
  • Primary Operations: PepsiCo’s main operations are in the United States. Coca-Cola holds the title of the world’s largest beverage company.
  • Diversification: PepsiCo has diversified its business between beverages and food. In 2017, food represented 53% of its revenues. In contrast, Coca-Cola focuses solely on beverages.
  • Decision-Making Process: Despite their size, both companies maintain relatively quick decision-making processes, which are crucial for adapting to changing consumer habits and trends.
  • Distribution Strategies: Both Coca-Cola and PepsiCo have extensive distribution strategies, with a global network of operations, bottling partners, distributors, and retailers.
  • Consumer Habits and Adaptation: Both companies invest heavily in demand generation through marketing activities to align with and influence consumer habits.
  • Product Portfolio: Coca-Cola primarily focuses on beverages, while PepsiCo has a wide array of products ranging from food to beverages.
  • Organizational Structure: Both companies have efficient organizational structures that facilitate quick decision-making, critical for consumer-focused businesses.
  • Distribution Advantage: Both companies have robust distribution systems, with Coca-Cola having the world’s most extensive beverage distribution system.
  • Marketing and Demand Creation: Both Coca-Cola and PepsiCo invest substantial resources in marketing to create and enhance consumer awareness and demand.
  • Coca-Cola’s Franchise Leadership: Coca-Cola’s success is attributed to its bottling partners and specific market-focused business models.
  • PepsiCo’s Digital Strategy: PepsiCo is heavily invested in a digital strategy, leveraging initiatives like data analytics and social media campaigns to enhance its brand presence.
  • Diversification Advantage: The diversified portfolio of PepsiCo allows it to tap into broader consumer segments, competing effectively with Coca-Cola on multiple fronts.
  • Focus on Healthier Choices: Both companies are adapting to changing consumer preferences by incorporating more “healthy” options into their portfolios.
  • Conclusion: The differences in product offerings, diversification, distribution strategies, and marketing approaches highlight the distinct business models of Coca-Cola and PepsiCo. While both compete, they cater to different consumer needs, with PepsiCo’s diversification allowing it to tap into a broader market spectrum.

Read Next: Coca-Cola’s Business And Distribution, Coca-Cola Mission Statement and Vision, Coca-Cola Competitors, What Does Coca-Cola Own?, Coca-Cola PESTEL Analysis, Coca-Cola SWOT Analysis, Coca-Cola Vs. Pepsi.

Related Visual Stories

Coca-Cola Business Strategy

Coca-Cola follows a business strategy (implemented since 2006) where through its operating arm – the Bottling Investment Group – it invests initially in bottling partners operations. As they take off, Coca-Cola divests its equity stakes, and it establishes a franchising model, as long-term growth and distribution strategy.

Who Owns Coca-Cola

Coca-Cola’s top investors include Warren Buffet’s company, Berkshire Hathaway, with 9.25% of shares, and other mutual funds like The Vanguard Group, holding 8.51% of shares, and BlackRock owning over 7.19% of shares of the company. Other individual investors like Herbert A. Allen, director of The Coca-Cola Company since 1982, and Barry Diller, Chairman of the Coca-Cola board since 2002. And former CEO Muhtar Kent. 

Coca-Cola Revenue

Coca-Cola generated over $43 billion in revenue in 2022, compared to over $38 billion in 2021.

Coca-Cola Profits

Coca-Cola generated $9.54 billion in net profits in 2022. Compared to over $9.7 billion in net profits in 2021.

Coca-Cola Revenue vs. Profits

Coca-Cola generated over $43 billion in revenue in 2022 and over $9.5 billion in net profits.

Coca-Cola Mission Statement

Coca-Cola’s Purpose is to “refresh the world. make a difference.” Its vision and mission are to “craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better-shared future that makes a difference in people’s lives, communities, and our planet.”

Coca-Cola SWOT Analysis

Coca-Cola is the market leader of the soft drink industry. It is also the most widely recognized brand, with a Business Insider study revealing that a staggering 94% of the world population recognizes the red and white logo. However, Coca-Cola faces significant challenges with increasingly health-conscious consumers and less access to water resources.

Coca-Cola PESTEL Analysis


What Does Coca-Cola Own?

The Coca-Cola Company is an American multinational beverage corporation founded in 1892 by pharmacist Asa Griggs Candler. Many consumers associate the company with its signature soda in a red can or bottle. In truth, however, The Coca-Cola Company owns a plethora of soft drink, juice, tea, coffee, and other beverage brands. 

Coca-Cola Competitors

The Coca-Cola Company has 21 different billion-dollar brands or brands that generate more than $1 billion or more in revenue each year.  The company also sells its products in nearly every country in the world, with Cuba and North Korea the only two countries where it is not sold officially. What’s more, the Coca-Cola brand is worth $87.6 billion, making it one of the most valuable among all companies. Though these figures allow Coca-Cola to enjoy market dominance in many countries, the company is nevertheless subject to intense competition.

Coca-Cola vs. PepsiCo

Coca-Cola generated over $38 billion in revenue, compared to PepsiCo’s over $79 billion. 

Who Owns Pepsi

Pepsi is owned by PepsiCo, the holding company which owns many brands spanning from drinks to food & snacks and more. PepsiCo generated nearly $80 billion in revenue in 2021 and over $7.6 billion in profits. PepsiCo is primarily owned by institutional investors like The Vanguard Group (8.9%) and BlackRock (7.6%). Top individual investors comprise Robert Pohlad, the company’s board member; and the company’s CEO, Ramon Laguarta.

What Does PepsiCo Own?

PepsiCo was founded in 1902 by American pharmacist and businessman Caleb Bradham as the Pepsi-Cola Company. Bradham, who hoped to emulate the success of Coca-Cola, marketed the beverage from his pharmacy and registered a patent for its recipe the following year. Today, Pepsi is a global company with a portfolio of 23 billion-dollar brands, or brands earning more than $1 billion in annual revenue. Sixteen of these brands are beverage-related, while the remaining seven are associated with snacks and other food products.

Pepsi Competitors

In 1965, PepsiCo acquired Frito-Lay in what the chairmen of both companies called a “marriage made in heaven”. The resultant company transformed PepsiCo from a soft drink organization and set it on a path to becoming one of the world’s leading food and beverage companies.  Today, PepsiCo claims to operate in more than 200 countries and territories around the world with seven distinct divisions and many successful brands.

PepsiCo Revenue

PepsiCo generated over $86 billion in revenue in 2022, compared to over $79 billion in revenue in 2021 and over $70 billion in 2020.

PepsiCo Profits

PepsiCo generated nearly $9 billion in profits in 2022, compared to over $7.6 billion in profits in 2021 and over $7 billion in 2020.

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