Cola Wars: Will Pepsi Or Coke Win Millennials' Loyalty?

Soda companies have plenty of challenges these days. Parents rage against high-fructose corn syrup, kids’ diets are under scrutiny as obesity rates rise, and soda machines are being removed from schools, not to mention competition from other beverages. And of course there’s competition between the top two brands, Coca-Cola and Pepsi.

The Wall Street Journal revealed just-released numbers from Beverage Digest showing that Diet Coke has surpassed Pepsi as the #2 soda brand in the U.S. based on sales. The author alludes to a problem with the effectiveness of Pepsi’s marketing plan. It’s recent Pepsi Refresh project has a loyal following, but that has yet to translate to a boost in sales. Pepsi stands by its program expecting it to “help boost revenue in the long run.” Meanwhile, Coke continues with a traditional plan with spots during the Super Bowl and Academy Awards.

Both brands have been making interesting marketing moves to appeal to Millennials in recent weeks.

Coke announced plans to go after global youth with a music-based campaign...featuring Maroon 5. Yeah, that’s not the “youth focused” band we would have chosen either, but at least Coke is right that Millennials care about music, and it gets an emotional response. No doubt the campaign would be more successful if the brand had asked teens who they wanted to see featured in the campaign.

Pepsi is making its play by continuing to build it’s reputation as a socially responsible company. This week, it announced that it has created the world’s first non-petroleum based plastic bottle. Chemically, the bottle is the same as traditional plastic bottles, but it’s made from agricultural byproducts, such as pine bark and corn husks, and sustainable plant materials, like switchgrass. Social and environmental resonate with most consumers, but these causes connect deeply with Millennials. They want to make things better — but are they willing to switch soda brands to do so? The challenge with both the new bottles and the Pepsi Refresh project is that Millennials want to see the effect of their efforts. As one of our Youth Advisory Board members noted recently, Pepsi Refresh is “really cool” but he has yet to feel a personal connection to it.

So, which company’s latest youth marketing plan has legs? While Coke is reaching out to the “fun” side of youth, Pepsi is going after what matters to youth, and we think the latter will have a more lasting effect. In addition, Pepsi is staying on message: they care about the future and making the world a better place. And that makes a difference to Millennials, who, after all, are the future, both as global citizens and as consumers.

What’s your take on these two youth campaigns? Let us know in the comments.