Distracted by marketing upheaval, Big Red's total share fell to 35.8% in those channels through the first nine months of 2004, dropping nearly a full point since last year, according to Beverage Digest data. For the same period, PepsiCo share held steady at 35.1%.
Coke remains king when it comes to fountain sales, controlling nearly 70% of the segment, and in 2004 was buoyed by the addition of the 16,000-unit Subway Restaurants chain. Fountain and institutional sales account for roughly a quarter of total soft drink volume.
Moreover, sales from wholesale clubs and Wal-Mart-which accounts for as much as 20% of total volume for the leading beverage marketers-aren't measured in the food, drug and mass-merchandiser results. Still, the intensifying share battle in bottle and can sales underscores the toll Coke's instability has taken in the past year.
Coca-Cola's revitalization plans include a $400 million annual boost in marketing support. Just last week, the company said it added new duties for main U.S. agency Berlin Cameron/Red Cell, New York. Coke also shifted integrated-marketing duties for its Dasani water brand to Anomaly, New York.
Several analysts and observers noted that Coke's hold on pricing may have contributed to its share and volume decline. Year-to-date, Coke's price per 288-ounces was $5.93, while Pepsi's was $5.57, according to Citigroup Smith Barney.
"It's not just the pricing model," said Tom Pirko, president of BevMark. "It's the marketing gaps, the advertising gaps, the lack of new competitive products."
"A price game in and of itself won't guarantee [share gains]," said Ronald Cotterill, director-food marketing policy center at University of Connecticut. "You can't do it in the long run at profitable levels unless you're able to establish incremental brand loyalty through positioning and new ads."
no bragging rights
Neither company has much to brag about. Both continue to see sales of their flagship soft drinks weaken. Pepsi-Cola and Coke Classic shares dropped 0.6% and 0.5%, respectively. Volume for the two brands fell 6.9% and 6.4%, as consumers turned to diet drinks, waters and non-carbonated beverages.
Coke and Pepsi are preparing to flood the market with diet-soft-drink marketing following disappointing results for their mid-calorie drinks. Pepsi is conducting an Omnicom Group shootout for Diet Pepsi and is expected to give an assignment, possibly Pepsi One, to TBWA/Chiat/Day, Playa del Rey, Calif. Coca-Cola has vowed to increase support for diet brands amid rumors that Diet Coke could be recast as Coca-Cola Light, the name it's known by in many markets outside the U.S. Interpublic's Foote, Cone & Belding, New York handles.