Dr Pepper just overtook Pepsi. Could Coca-Cola be next?

Let’s explore how Dr Pepper overtook Pepsi in America.

Neutrals in the Coke Wars

The Coke Wars were brutal, not just for Pablo Escobar and his hippos but also for PepsiCo and Coca-Cola. Since Coca-Cola launched in the 1880s and Pepsi followed a few years later, these soda titans have been warring in the world’s largest cities for soda supremacy.

In 1995, Coca-Cola reached 22% of the US soft drink market share, with Pepsi close behind at 15%. Dr Pepper has always been the dark horse; it had a tiny 5% share. 30 years later, we’ve a completely different scene. In June, Beverage Digest revealed data showing that Dr Pepper finally tipped over Pepsi to become second in the US.

How the hell did it pull that off?

Well, 139 years of solid marketing decisions have stood Dr Pepper in good stead to dominate the US market. These principles will always work, no matter how many new digital platforms pop up in the coming centuries.

Sticking to your roots

Dr Pepper launched in 1885 and, in the following years, made the prudent choice not to go toe-to-toe with the big boys. It decided it wasn’t a cola but a pepper soda, as legally declared by the FDA.

These days, one of the big consultancy firms would charge you six figures to call this “finding white space” but let’s call it what it really is: a masterclass in positioning that doesn’t get talked about enough.

Consumers don’t care about brands; marketers must pick just a handful of brand associations to be known.

It chose Different, Pepper and High Flavor.

This strategy worked from the very start.

This brilliant brand origin story from The Guardian reveals how Dr Pepper’s founder convinced Coca-Cola that they were so different that they should produce Dr Pepper on the Coca-Cola bottling lines. A truer test of “different” than any brand tracker: “Would my competitor make this for me without worrying?”.

It then pulled the greatest effectiveness hack any marketer can pull. It refused to change, relentlessly hammering this precise positioning for over a century to achieve what we’d now call a “distinctive brand.”

It didn’t fight it out over ‘joy,’ ‘happiness,’ ‘refreshing,’ or ‘energy,’ but it found its own associations to be known for, which consumers use when considering the soda category. These aren’t associations it is known exclusively for. Instead, it is known for these things excessively more than other brands. That’s distinctiveness.

It’s worth noting that Fritz Kola has done similar in Germany, hammering ‘Local’ and ‘High Energy’ hard. Now 24% of German soda drinkers drink the stuff. It works. The Guardian piece labors over modern digital tactics Dr Pepper has used to pepper this positioning into the modern psyche, but that’s an injustice.

What I’ve just shared above is something far more impressive: sticking to the founder’s roots, proper strategic thinking and expert positioning. “I would’ve written you a shorter letter, but I didn’t have the time.” The real skill is distilling the impossible into something simple. Clear and strategic.

Three words is what a good strategy looks like.

Mass reach and distribution

This clear strategy has then been executed to achieve high mental and physical availability – a brand that is easy to think of and buy. I won’t go into the specifics of its distribution strategy, mainly because I don’t know them, but this insistence on being different and not a cola means it can appear in all the coveted fast-food spots where Pepsi and Coca-Cola exclude each other.

Great positioning is only achieved in the minds of the target consumer. These three words do nothing on paper. Positioning must be achieved through broad reach, high attention advertising channels.

The brand has always spent big on stadium sponsorship but has recently benefited from TikTok. As part of my training at a large FMCG, a head of design once said the best way to check that you are consistent is not to audit your own advertising against the brand world but to instead audit what consumers say about you on social media.

Fans blew Pickle Dr Pepper up on TikTok by pimping their sodas at their local Sonic and Chick Fila. They understood the brand’s positioning and ran with it. This is the only advice I’ve ever seen make sense for “how to go viral”. If your brand truly stands for something and a relevant trend arises, consumers will do the rest. High-flavor whacky drinks are becoming all the rage. TikTok did the rest with these pickle videos reaching hundreds of millions of views.

Here’s where other commentary on this has gone wrong. People have chalked Dr Pepper’s success up to trending flavors and organic digital reach. That ain’t fair. Dr Pepper has been secretly investing in ol’ faithful: linear TV. Beautiful, high-attention, brand-building TV.

Vivvix TV data shows it has been overspending on its share of voice (SOV) v its share of the market (SOM), leaving Dr Pepper with a huge excess share of voice (ESOV) which we know is causally linked to brand growth.

Marketers get far too washed up in TV is dead narratives. Those who don’t fall for it will win. We even see newer brands, Starry and Poppi, getting smart to this and investing hard in TV. Dr Pepper’s impressive TV spend, with challenger brand cash increasing competition, sees Coca-Cola and Pepsi’s 2024 TV SOV take a serious hit. Dr Pepper looks in a good spot to take on Coca-Cola.

Effective advertising

ESOV is one thing, but that’s just the quantity of advertising. What about the quality?

That’s where creative effectiveness enters the chat. System1 measures the emotional response to advertising to understand how effectively it uses media reach. We’ve shown that ESOV explains half of long-term market share changes when combined with our Star Rating metric (ad long-term creative quality).

That’s a powerful thought. Advertising is often called a “weak force.” If you look at today’s market share and media spend (without ad quality), it seems that way. How is Apple so big?

But if you consider market share changes and ad quality, advertising explains half of brand size changes. It suddenly makes you want to call your ad agency and take them out for dinner.

As we test most US and UK ads that hit TV, I thought I’d explore Dr Pepper’s ad quality. Has it been taking genuine advantage of this impressive TV reach?

I was not disappointed. It really has.

From testing 1,500 US soda TV ads between 2017 and 2024, the average Star Rating for the entire category is 2.5, but it is decreasing every year.

Dr Pepper has bucked this trend, creating more effective ads month-on-month with an average of 2.8-Stars. It’s seriously impressive. Creative agency Deutsch LA is clearly worth the cash.

Big brands often read the long and short of It and go the other way, thinking activations and ads grasping at a sale are the devil. We test for this as well, seeing how heavily branded and emotionally engaging ads are to understand how effectively they convert existing demand (“sales”).

Dr Pepper has managed to do the long and short of it. You can see its ads are pretty consistently better than the category for our Spike and Star Ratings. Making entertaining emotional work while landing key messages and being brand-centric is hard, but they’ve managed it.

A fresh, healthy brand

And then the final difficult task of a savvy brand manager is not letting your brand become an icon. Another word for icon is a relic. Marketers often want to make iconic brands. Screw that. I want my brand to be one for the people, modern, with a clear role in 2024.

Dr Pepper listens to its consumers to ensure it grows modern relevance. It leaned into pickle TikTok content and was rewarded with 4m views. It understood that the high-flavor brand still needed to live up to that promise and released a strawberry flavor. It also saw fans making viral Dr Pepper coconut drinks and turned it into a new variant to buy.

It has followed the marketing textbooks and understands Gen Z, leaning into current trends to mirror the tone of modern video without losing its positioning. In this new brilliantly effective ad released this year, there’s that 139-year-old positioning: “unique blend of 23 flavors.”

The Dr is coming for Coca-Cola

The Dr has nailed the balance between digital and “old dusty TV.” Its ads are incredibly creatively effective for long–and short-term objectives and only getting better. They are fresh, relevant and modern. But arguably, most of this work over the past few years hasn’t even appeared in its market share yet.

If you’ve read this far, you really are a marketing nerd. So here’s some brilliant brand tracking data from Tracksuit that shows that Dr Pepper is just getting started.

1. This consistent focus on being and acting different is clearly seen in their brand image. Leading in “Innovative” and “Like no other.” with the national US population but with 18-34 year old’s they are streets ahead.

2. You also see this in their unprompted brand image, Dr Pepper is commonly thought of as “unique” and “different” while Pepsi is “classic” and “traditional”. It is amazing what years of consistent positioning can do…

3. Relevance (“For people like me”) is key for sodas. It’s the most potent attribute in turning brand consideration into preference. Astoundingly, Dr Pepper is only slightly behind Coca-Cola nationally in relevance, but for 18-34-year-olds, it pops.

This is why I believe Dr Pepper has a strong chance of catching up with Coca-Cola in the US. You can see it in Dr Pepper’s 18-34-year-old brand funnel. There’s little between them despite the brand being almost three times smaller.

The cola wars may be over, but the soda wars have just begun.

Read more from Andrew here.