Dr Pepper: How The Perennial Third-Place Soda Surpassed Pepsi
The hierarchy of power in the world of ‘Big Soda’ has shifted, and the world is taking notice. Dr Pepper, the longtime bronze medalist in the contest for consumer love, has now surpassed Pepsi as America’s second favorite soft drink, marking a significant milestone in the soda wars traditionally dominated by Coca-Cola and Pepsi.
According to Beverage Digest, when providing remarks to the Wall Street Journal last month, Dr Pepper now shares the No. 2 spot with Pepsi, each holding 8.3% of the market share, while Coca-Cola maintains a strong lead with 19.2%.
The Power of Positive Marketing (and Just Plain Fun)
Dr Pepper’s rise can be attributed to its strategic and positive marketing. Unlike many brands that have dipped their toes into tense political and cultural debates over the last decade, Dr Pepper has focused narrowly on being politically neutral and inclusive in their marketing and advertising activities, resonating with a broad audience.
“In comparison to Pepsi, consumers view Dr. Pepper as having a more promising future, doing a better job at keeping up to date and, importantly, being more distinctive and different than Pepsi,” Lynne Field, head of strategy at FutureBrand, said in an interview regarding the paradigm shift between the soda giants in an interview with MarketingDive.
The Secret Ingredient is… Everyone Having a Good Time
Dr Pepper’s innovative flavors, such as the standout Dr Pepper Strawberries & Cream, and usage of user generated content (USG) campaigns and viral trends such as TikTok’s “Dirty Dr Pepper,” have played a major role in capturing consumer interests, as noted by CNN.
Timothy Cofer, CEO of Keurig Dr Pepper, told CNN that the push to promote these flavors in a way which gets regular people involved made the campaign “a standout success”. By embracing creativity and fun, Dr Pepper has done what many brands are struggling within our growing influencer-focused attention economy— maintaining relevance and excitement.
The Appeal of a Polarizing Brand
Dr Pepper’s unique flavor profile is a key factor in its success. According to Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, “One of the best things that Dr Pepper has going for it is that it is a polarizing brand. Some people really like it, and some people don’t. But that makes it very intriguing for people.”
“Americans have developed a preference for spicier foods,” said Charles Lindsey, who teaches marketing at the University at Buffalo School of Management. “That plays well into the flavor profile that Dr Pepper offers.”
So well, in fact, that even Coke seems to have noticed. In February, the brand released its own piquant flavor: Coca-Cola Spiced.
The Numbers Show It
The investment advisors at the Motley Fool have reported that the money proves Dr Pepper’s moves are working. Keurig Dr Pepper’s financial performance had sales reach as high as $3.47 billion in Q1 of 2024, and things don’t look like they’re slowing down anytime soon.
“The good news for investors today is that Keurig Dr Pepper stock is cheaper now than it was five years ago and the dividend yield is almost as high as it’s ever been at 2.5%,” the piece noted. “Moreover, the company is still growing at a modest pace, which provides an opportunity for future earnings growth and rewarding shareholders.”
A New Silver Medalist in the Competition for the Love of Soda Drinkers
Dr Pepper’s replacement of Pepsi on the market podium shows that whether you agree or not, their efforts have succeeded thus far.
Avoiding stepping into arenas they shouldn’t (it’s a soda company after all), focusing on building their own community, and showing that fun is universal to all consumers, has helped them carve out a place in what was already a highly competitive market.
Adweek’s Perspective: How Dr Pepper Beat Pepsi
Dr Pepper’s rise to the No. 2 spot is a testament to its unique marketing strategies and the decline of Pepsi’s focus on its core brand. Adweek highlights Dr Pepper’s quirky, fun campaigns and strong Gen Z engagement, along with Pepsi’s strategic shift towards healthier, functional beverages. Dr Pepper’s ability to resonate with younger consumers and maintain brand excitement has set it apart in the competitive soda market.
Takeaway for Professionals
Strategic Neutrality: Embrace polarization and a neutral stance to widen brand appeal and generate brand excitement.
Innovation in Product Offering: Continuously introduce unique and exciting product variations to keep the brand fresh and relevant.
Community-Centric Campaigns: Focus on campaigns that promote community, inclusivity, and positive experiences to build a loyal customer base.
