Coke or Pepsi?
A lot of money rides on the consumer’s decision. A small change in the percentage of people who drink one cola or the other can add up to millions of dollars in sales across mid-Michigan. As a result, the two giant soft drink giants are constantly battling over local turf.

The marketplace is rapidly changing for both Coca-Cola ® and Pepsi-Cola, too. No longer do they distribute only products that fizz. Consumer demand for more choices has spawned what some are calling a “bevolution” as many people watch their carbohydrate intake closer than their spending habits.

Those consumer preferences have forced both Coke ® and Pepsi to look for ways to expand sales and serve a more health-conscious society. Offerings now include bottled water, teas, juices, sports drinks, zero-calorie and mid-calorie carbonated soft drinks, regular soft drinks, and even milk-based beverages.

Last year, Coke introduced its first dairy product, vanilla and banana Swerve, made from nonfat milk. Pepsi is still testing Milk Chillers in chocolate, banana and strawberry. In fact, so much emphasis is being put on alternative beverages that the National Soft Drink Association announced last fall it had changed its name to the American Beverage Association.  

The Michigan Soft Drink Association, a nonprofit organization representing the producers and distributors of soft drink beverages in the state, claims bottlers are meeting consumer demand by offering a wider array of beverages than ever before.

“The number of different products carried by our beverage distributors has exploded. The need to produce products to fulfill customers’ desires for bottled water, coffee-based drinks, juices, dairy and other flavors has multiplied [the products offered] significantly in number over the years,” said Bill Lobenherz, president of the Michigan Soft Drink Association.

The Pepsi Bottling Group (PBG) facility in Lansing on Grand River Avenue, just west of Capital City Airport, is a sales and distribution facility. The bottling of Pepsi products for sale across mid-Michigan, including Pepsi, Diet Pepsi, Mountain Dew and Sierra Mist, is done at a bottling plant near Howell.

PBG’s mid-Michigan facility became a Pepsi franchise in 1958 and was acquired by PepsiCo in 1970. The facility became part of PBG when PepsiCo spun off its bottling operations in 1999. It has approximately 100 local employees, which includes sales and delivery personnel.

The Pepsi Bottling Group is not a part of PepsiCo, said PBG spokesman Michael Goodwin, even though PepsiCo retains an equity interest in PBG of about 40 percent. PBG accounts for more than half of the Pepsi-Cola beverages sold in North America and about 40 percent of the Pepsi-Cola beverages worldwide.

“PepsiCo handles national marketing and develops new brands. Pepsi-Cola Company, a division of PepsiCo, manufactures and sells beverage concentrate syrup and finished goods to PBG and other Pepsi-Cola bottlers. We then distribute them to our customers,” Goodwin explained.

PBG also distributes Lipton Iced Tea, Lipton Brisk, Tropicana juice drinks, FruitWorks, Starbucks Frappuccino, Starbucks Doubleshot, SoBe fruit drinks and teas, Dole single serve juices and blends, and Aquafina to clients across mid-Michigan.

The Coca-Cola Bottling Company of Michigan is part of Coca-Cola Enterprises. CCE is the largest bottler and distributor of Coca-Cola products in the world, said CCE spokeswoman Ashlie Keener.

The Coca-Cola Bottling Company’s Creyts Road facility in Lansing employs 170 and distributes all Coca-Cola products, including Coca-Cola Classic, diet Coke, Sprite, Fanta, Dasani bottled water and Minute Maid juice, Keener said.

“Our product line extends well beyond traditional carbonated soft drink categories to beverages. We expect to find other areas of growth through similar product expansion,” Keener explained.

The local Coca-Cola Bottling facility has been in its same location since 1978. It was called LaSalle Coca-Cola until the 1950s, at which time the Coca-Cola Company owned the operation. It became part of Coca-Cola Enterprises in 1986, Keener added.

Competition for local dollars is fierce, PBG’s Goodwin said, with the battleground ranging from store’s shelves to public school vending machines and university cafeterias.

Both Coke and Pepsi have pursued exclusive contracts with school districts across mid-Michigan to supply vending machines with a variety of beverages, including bottled water and juices. The practice has led to some schools slamming the door on soft drinks altogether because of health concerns.

“We have become very sensitive to that and are looking at ways to expand relationships and add value to those kinds of partnerships,” said Goodwin.

By exposing products to students, advertisers can establish loyalty to a brand sooner, which means there are many years of consumption ahead.

Along with the school-vending question, the Michigan Soft Drink Association is lobbying Michigan legislators on the possible expansion of the bottle deposit law, to include non-carbonated beverages, like juice and bottled water, Lobenherz said. The group opposes such a move.

“To expand the bottle law would not help reduce waste that much and would cost the Michigan public,” Lobenherz said. “Sometimes I think we rest on the laurels of our deposit bill in this state too much.”  

The bottle law, which took effect in 1978, has caused the state to ignore the need for additional recycling programs, Lobenherz argues.  

The Michigan Soft Drink Association is one of the oldest associations in Lansing. Formed in 1911 as the Michigan Bottlers of Carbonated Beverages, the group’s present name was adopted in 1968.

“The role of the association really hasn’t changed too much over the years. Our primary goal is to represent the beverage industry before state government,” said Lobenherz.

The local trade association represents three major soft drink manufacturers with operations in the state, including Coke, Pepsi, and Dr. Pepper/7-Up Bottling in Holland, Lobenherz said. Faygo, which has operations in the Detroit area, is not a member of the Michigan Soft Drink Association.