Is Pepsi’s cheeky jab at Coca-Cola a message for Burger King, Subway, and other fast-food giants?

Pepsi's latest ad challenges Coca-Cola, but risks boosting its rival's visibility. Is this a risky strategy for Pepsi?

In the ever-competitive world of soft drinks, Pepsi has thrown down the gauntlet once again, this time with its provocative Tastes OK campaign, taking a direct jab at arch-rival Coca-Cola. However, as the campaign unfolds, it's becoming clear that the bold strategy may carry its own set of risks.

The campaign, executed by Special, leverages a creative twist on Pepsi's well-known #BetterWithPepsi campaign to draw attention to a design flaw in Coca-Cola's logo and packaging – the subtle inclusion of the phrase 'OK' within the Coke name. The campaign challenges consumers to reconsider settling for a drink that just tastes 'OK' when they could opt for Pepsi Max.

The juxtaposition of the Coca-Cola can on a sad, poorly lit, and empty dinner table with the tagline Tastes Better with Pepsi suggests that Pepsi is not only positioning itself as a superior beverage but also as an ideal accompaniment to famous fast food.

While the approach is bold and amusing, it may be treading on risky ground. The visuals of the ads prominently feature Coca-Cola, with the 'OK' embedded in its iconic logo being the central theme. This unintentional exposure for Coca-Cola in Pepsi's campaign could be seen as counterproductive, inadvertently giving more visibility to the rival brand.

The risk lies in the fact that the visual association of Coca-Cola with the Tastes OK tagline could inadvertently reinforce the brand presence of the rival soft drink.

Tastes OK (with Coke) builds on the previous iteration of the beverage giant's Tastes Better with Pepsi campaign, which creatively incorporated optical illusions to reveal the Pepsi logo hidden in the packaging of rival brands and major fast-food chains.

The campaign will be prominently featured in out-of-home (OOH) advertising sites across the country, reinforcing its message through print, display, publisher partnerships, an influencer program, and social media channels. The extensive reach of the campaign indicates Pepsi's determination to challenge Coca-Cola's stronghold in the soft drinks market.

The ongoing battle between Pepsi and Coca-Cola for market dominance is well-established, with each company employing various strategies to gain an edge. Pepsi's Tastes OK campaign is the latest salvo in this marketing war.

This latest move by Pepsi harks back to its successful Better With Pepsi campaign, where it cleverly positioned itself as the superior choice to accompany popular fast-food items. The connection between the two campaigns lies in Pepsi's consistent message that its beverage enhances the overall dining experience, challenging consumers to choose Pepsi over its competitors.

Beverage trends in the fast food industry

The fast-food industry's beverage choices are not arbitrary; several renowned fast-food chains like Burger King, Mc Donald's, and Wendy's have been associated with either Coca-Cola or Pepsi, and the decision to align with one or the other is often influenced by exclusive contractual agreements, pricing, and overall brand compatibility. In recent times, there has been a noteworthy shift in partnerships, with some brands opting to switch allegiance from Pepsi to Coca-Cola.

The dynamics of this decision are complex, involving negotiations, market trends, and consumer preferences. The Pepsi versus Coca-Cola battle extends beyond taste tests and witty ad campaigns; it influences the very fabric of partnerships within the food and beverage industry.

It's worth noting that Coca-Cola's strategic initiatives, such as the Coke with meals initiative and its 15 percent ownership stake in the food delivery platform Thrive, which competes with Swiggy and Zomato, boasts a substantial network of over 14,000 restaurants, have played a significant role in sealing agreements with restaurants.

This collaboration is mutually advantageous for both restaurants and the beverage manufacturer, contributing to the ongoing evolution of the beverage landscape within the fast-food industry.

The cola wars saga

Recent shifts in beverage partnerships in the fast-food sector underscore the competitive nature of the industry.

In August 2022, KFC and Pizza Hut in Malaysia transitioned from Pepsi to Coca-Cola, citing a multi-year partnership that aimed to provide diners with a refreshing range of beverages. The move reflects the economic dynamics and exclusivity of contracts that shape these partnerships.

January 2023 witnessed Culver's, a prominent U.S. burger chain, causing a stir as it switched from Pepsi to Coca-Cola, surprising and even upsetting some devoted fans. Subway India followed suit, terminating its five-year exclusive deal with PepsiCo and aligning with Coca-Cola across all its 570-plus stores.

In October 2023, Red Rooster in Australia made a significant change by replacing Coca-Cola with Pepsi in its drinks menu, aligning itself with the rival cola brand.

The trend continued in India, where Subway ended its exclusive deal with PepsiCo after five years and entered into a partnership with rival Coca-Cola. Subway's move reflects the strategic decisions that fast-food chains often make to align themselves with a particular beverage brand.

The most recent development involves Burger King considering a switch from its decade-long partnership with PepsiCo in India to an exclusive collaboration with Coca-Cola. Executives suggest that the agreement, if finalized, will provide Coca-Cola with instant access and a strong presence in over 391 Burger King outlets, including its subsidiary BK Cafe throughout India.

Beyond the fizzy feud, geopolitical tensions have played a role in the beverage choices of consumers in Egypt. Since the start of the recent conflict in the Middle East, there has been a perceived boycott of Western-made products, including Pepsi and Coca-Cola, with Egyptian wholesalers facing challenges in selling stocks of these brands due to the shift in public sentiment.