Wednesday, March 14, 2007

Pepsi Cracks the Coca-Cola McDonald's Partnership


McDonald's 51-year exclusive partnership with Coca-Cola has finally begun to crumble. The restaurant chain is experimenting with giving consumers a choice between bottled products from Coca-Cola and archrival PepsiCo, while maintaining the traditional fountain drink offerings.

The 10-month-old initiative test markets McDonald's restaurants in the Texas and Missouri. PepsiCo products including Gatorade, Mountain Dew and Lipton Iced Tea are now available in bottled form along with bottled Coca-Cola products. Pepsi and Diet Pepsi are not part of the test program, which might make this groundbreaking initiative less noticeable to consumers.

“Where consumers have freedom of choice, like they do in [convenience] stores, that’s where you see Pepsi have a lead,” said one Coca-Cola executive.

“It’s fountain that tips the scales for Coke, and it’s McDonald’s that tips the fountain scale.”

While Coca-Cola remains the “preferred beverage supplier”, if PepsiCo products become available nationwide, it could tip the balance in the long-standing beverage war with Coca-Cola, giving PepsiCo the winning hand.

Thanks Advertising Age!

-Tim

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