The Pepsi Challenge and why we keep making stupid choices.

“The entire principle of a blind taste test was ridiculous. They shouldn't have cared so much that they were losing blind taste tests with old Coke, and we shouldn't at all be surprised that Pepsi's dominance in blind taste tests never translated to much in the real world. Why not? Because in the real world, no one ever drinks Coca-Cola blind.” Malcolm Gladwell

For most of the 20th century Coca Cola was the most dominant brand and carbonated beverage in the entire world. They had plenty of competitors, but their marketing and packaging became so widely recognized that it didn't matter. Can century-old assumptions be dislodged by actual evidence? Can the king of cola ever be dethroned?

In 1975, one of its main competitors, Pepsi Cola, came up with a marketing strategy that threatened to take Coke down. It was called the Pepsi Challenge. Simply, Pepsi went to malls all over the country and invited shoppers to take blind taste tests between their product and Coke.

When given a choice between two similar colas in unmarked glasses, people surprisingly chose Pepsi over Coke in most instances. Mind you, this wasn't the least bit scientific, but it shook up the cola wars. Taste is a subjective thing, but Pepsi had been judged significantly sweeter than Coke, which people liked in the tests.

Pepsi then flooded the television airwaves with commercials like the one below, claiming that their product tasted better than Coke and that our prior assumptions of each couldn't be trusted.

This simple campaign so shook up the cola wars that it prompted Coca Cola to do something in 1985 that they had never dared do before- change its formula. They made a new Coke that was sweeter and closer to Pepsi, but consumers didn't care for it. They were used to the old formula, and Coke was forced to reintroduce Classic Coke shortly thereafter.

New Coke was gone by the year 2000, and the power of branding and inertia was back in play. The perception of Coke was so powerful that it overruled any evidence to the contrary. Even with proof that so many Coke drinkers preferred Pepsi, it was never was able to overtake Coca Cola and has since branched into snack foods like Frito Lay.

This story from 60 years ago explains a lot to me of what is going on today. The dominance of Coke emerged early in the 20th century and has never been seriously challenged, save for this one episode. Perhaps it was the brilliant marketing and packaging, or perhaps it was because the original inventors put actual coca leaves (cocaine) into the mixture. For whatever reason, the branding became more important than the actual taste.

When I think of Coke I think of polar bears and Santa Clause- both used heavily in advertising when I was growing up. When I think of Pepsi, I think of Michael Jackson's hair on fire in the notorious commercial, Neither has anything to do with the taste. It's all impressions from branding and commercials.

How many of our decisions today are based on branding alone, and not on the quality of the products we can choose from? Probably more than we'd like to think. Voting behaviors are mostly about branding and not about policies. Sports allegiances are about branding and geography. Car purchases are based on feelings and not Consumer Reports data. Choices can get very complicated, and our brains are always looking for shortcuts to make it simpler- thus branding rules over reality.

I invite everybody to take the Pepsi Challenge in their life at some point. Not necessarily with colas, which are declining in favor due to health concerns. But with anything they choose mindlessly based on the brand alone. Ask a friend to mix up something that you use regularly and give you a blind preference test. You might surprise yourself. In a blind test, you only have the merits to go by, and the brand is hidden. Sometimes a good brand means good quality, but not always. If they know you'll choose them no matter what, they can get lazy and lower their quality and effort. That goes for sports and politics as well. Why improve your product when you can trash the other guys instead? Brand loyalty is hard to establish but even harder to dislodge.

The Pepsi Challenge has returned for 2025- this time with the zero calorie options. We shall see if anything changes, but don't count on it.