Historical Spotlight: How Pepsi Capitalized on Coca-Cola's Mistakes
There’s nothing I love more than an ice cold Lime Coke Zero. It’s truly a shame that the only time I can enjoy one is when I eat at a restaurant that has a Coke Freestyle machine like Wendy’s and even those have started becoming extinct as stores like Zaxby’s remove them from their menus. I can’t buy a 12-pack of cans in a grocery store, I can’t order it while at a sporting event, and I can’t just randomly enjoy one without going on a wild witch hunt. Join me as we shine a Historical Spotlight on Coca-Cola as a company and the discriminatory policies they had toward Black Americans that allowed Pepsi to become a major competitor.
Coca-Cola was originally created on May 8, 1886 by a pharmacist in Atlanta, Georgia named John Pemberton. He was a Confederate Colonel wounded in the Civil War and was addicted to morphine. With his medical degree, he started searching for a substitute to kick his addiction. Through his work, he created the original Pemberton’s French Wine Coca nerve tonic and sold it at his drugstore in Columbus, Georgia.
When Atlanta and Fulton County passed prohibition in 1886, he rebranded his drink as Coca-Cola and marketed it as a temperance drink to entice those abstaining from alcoholic beverages. He also introduced it to the world as a patent medicine, a non-prescription medicine that is protected by trademark, and claimed it cured morphine addictions, indigestion, nerve disorders, headaches, and impotence.
Over time, the winning recipe took off to become the worldwide icon that it is today. From the very beginning, its formula was kept top secret and protected by trade laws. The original copy was held in Truist Financial’s main vault in Atlanta for 86 years before being moved in 2011 to a new vault in the World of Coca-Cola Museum.
As time went on, it adopted a franchising model where the Coca-Cola Company only produces a syrup concentrate that is sold to bottlers who mix it with filtered water and sweeteners, package the mixture in cans and bottles, and then distribute it to retail stores, vending machines, restaurants, and foodservice distributors. It grew in popularity quickly and literally changed the landscape of soft drinks by inventing a distinct category called colas. Despite its major accomplishments, the brand has a sordid history of discrimination that simply can’t be ignored.
During the late 1890s, cocaine was a fundamental ingredient in the formula. Racist newspapers and politicians claimed that the substance was causing Black Americans to become violent and attack white people. As a response to the public pressure, Coke completely removed the now-illegal drug from the recipe by 1903 and replaced it with extra caffeine and sugar.
Coca-Cola also completely avoided marketing to Black Americans during the Jim Crow era, choosing to instead cater almost exclusively to white middle-class consumers. The company refused to advertise with organizations and platforms that exclusively targeted Black communities. Coke products were also limited to segregated vending machines, putting the product out of reach for many Black Americans, regardless of their economic situation.
The most notable competitor, Pepsi, which is produced by PepsiCo, made sure to capitalize where Coke dropped the ball by marketing to Black Americans and refused to allow racism to dig into their profits. In the 1940s, after being on the brink of bankruptcy from the Great Depression, Pepsi decided to nurture the niche market of Black Americans who were widely neglected and outright ignored by other white-owned companies.
Pepsi hired an all-Black marketing team, featured Black families and professionals in their advertisements, and positioned themselves as a different option for less affluent members of society by selling larger bottles than Coke for a similar or even lower price. It drew customers to its brand by standing against racism and pointed out Coke’s reluctance to hire Black workers.
As a result, Pepsi grew a strong customer base that helped establish it to either outsell Coke in certain markets or follow closely behind in second. The strategy worked well, and during the 1950s, Black Americans were three times more likely to purchase Pepsi over Coke.
Seeing the loss in revenue and market positioning, Coca-Cola eventually hired Black advertising executives in the 1950s to turn their discriminatory narrative around. They created marketing campaigns to reach the demographic of buyers who they previously didn’t deem worthy to purchase, drink, or enjoy their product. Integrated Coke ads weren’t even produced until the late 1960s after Dr. King’s assassination rocked the country.
Despite gaining some Black customers from the successful marketing pivot, Coke still struggled with their reputation after word got out about their racist work environment. Over time, the company has been sued for poor working environments, harassment, and racial discrimination in pay, promotion, and evaluations by former employees. Even as recently as 2000, they settled a major class action racial discrimination lawsuit for $192 million and made extensive changes to its personnel policies and procedures that were reviewed and approved by an outside panel.
Coca-Cola has grown to be sold in over 200 countries worldwide and it’s estimated that consumers drink more than 1.8 billion servings each day. It’s undeniable that the company has somewhat corrected its outright racist ways of the past, but we always have to remember the injustices wrongly placed on Black Americans solely because of their skin color.
Our ancestors who got up in the mornings, went to work, took care of their families, paid their taxes in society, and tried their best to fight against injustices were denied a very simple can of soda that we all take for granted today. Buying and drinking a Lime Coke Zero wouldn’t have even been an option for me just 70 years ago.
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Signed,
Jessica Marie
