How Pepsi won the Coke vs Costco battle

As you know, the world is black and white, you are either a Coke fan or a Pepsi fan, the option to not care is not available. There is a difference between Coke and Pepsi and you are either in one camp or the other.

For the moment I will spare you from my preference, but I will tell you it is a four letter word that rhymes with yoke.

If you are not aware, Coke and Costco have had a long standing feud over price. Both think because their name is short and begins with a C, they should make the largest profit. The fact is they both have the ability to exert and enormous amount of pressure on the other.

• Coke has a brand that has been built over decades, simply said, good times or bad; you always have room for a Coke.
• Costco on the other hand, has less brand recognition, but they do have an unbelievable amount of buying power. As a former purchaser of alcoholic beverages for large restaurants, there is a price book for what you can pay for a particular item. There is the retail rate(1 btl or case), restaurant rate (cases or more), and then there is the Costco Rate (by the pallet). Of course anyone can get the Costco rate, as long as you can afford to purchase a pallet of any given product. Costco’s buying power is immense.

Needless to say, Costco and Coke have waged a very public campaign over who is right and who is wrong in their pricing wars. Several times, Costco has discontinued Coke for several days, weeks and months, until finally they bring it back.

Well… it looks like only one company has won during this entire battle, and that company is PEPSI.

You may wonder how Coke and Costco feuding can make any difference on Pepsi. Well the answer lies in the food court. For those of you familiar with how restaurants work, you can skip this next section.

Every restaurant that you go to has a choice, Coke or Pepsi. Based on that decision, Coke or Pepsi provide them a certain amount of promotional material, from menus, to billboards, to neon signs. Based on your buying power and negotiation skills, your can gather a lot of tangible materials from your own restaurants Coke vs Pepsi battle. These little wars go on every day, in every city , nearly around the world. If you carry Coke, you can bet the local Pepsi representative is paying you a visit and vice versa. Long story short, both companies care about one thing, what beverage comes out of your soda machine.

So back to Costco, for years, even during the feuds, the Costco food court continued to serve Coke. That is until recently, when suddenly Costco is serving Pepsi in their food court. Every customer that leaves Costco, walks right past the Pepsi beverage station. Every Costco member that eats in the food court is presented with Pepsi products for their liquid refreshment. If I was the CEO of Pepsi, I would send a thank you card to the CEO of Coke.

The message would read, “Thanks for making us your Costco connection!”

Coke vs Pepsi? No it is Coke vs Costco and Pepsi wins…