Pepsi is no longer the second biggest soda brand. It's Dr. Pepper. Dr. Pepper has now reached silver medal status. Dr. Pepper now overtaking Pepsi. Pepsi is no longer the second biggest soda brand. Dr. Pepper has moved into second place. For the first time in 30 years, Dr. Pepper has nabbed the silver and Pepsi is no longer the second best selling soda in the country. But while everyone is congratulating the Dr on the massive accomplishment, there's something else happening that'll change the soda game forever. The end of Pepsi. Hello, internet. Welcome to Food Theory, where today we're talking about big old number two. Yeah, I just heard it. I'm rolling with it. Dr. Pepper has become the second best selling soda in the country, knocking Pepsi down to number three and changing the hierarchy of power in the soda-verse for the first time in 30 years. See, Mr. La Rock, this is how you actually do it. It's a classic underdog story. Dr. Pepper is the oldest major soft drink brand and was counted out, not even cracking the top five in the early 2000s, but it decided enough is enough. And over the years, it's been climbing the ranks. It's been doling out prescriptions for pain and now only Coke stands in its way. But it's not just a plucky attitude and their 23 flavors that got Dr. Pepper to where it is today. This shift happened because Pepsi has been falling down the ladder for years. So stick around because by the end of this episode, I'll prove to you that this shift in the rankings is the beginning of the end for Pepsi. Let's talk about the rankings real quick so we're all on the same page. What everyone is talking about here is market share percentage. Basically, of all soft drinks sold in the US, what percentage of that was Dr. Pepper or Coke or whatever? Also, these numbers are specifically referring to the individual drinks from all these companies. So this doesn't mean that Keurig Dr. Pepper as a company has passed PepsiCo. In that sense, it's still pretty comfortably in the lead. It's also limited to sales in the US because again, globally, Coca-Cola and PepsiCo dominate. And it's not even close. Don't get it twisted, though. This shakeup is still impressive as heck because sodas on the whole are on the decline and have been for the last 20 years. So the fact that Dr. Pepper has been able to climb is an accomplishment in and of itself, let alone the fact that it was able to go from sixth place in the early 2000s to second place now. That's not all there is to it, though. Sure, Dr. Pepper has been able to snag a couple of percentage points in the market over the years, but what's nuts is that in the same amount of time, Pepsi has lost over 5% of its share, from 13 to just above eight. To put that into perspective for you, Coke and Diet Coke are the other two in the top five that have gone down over the years, and they've both only lost 1%. So where did it all go so wrong for Pepsi? We've already talked pretty extensively about the history of Pepsi over on our video about their million-dollar logo, but TLDW, Pepsi's whole angle in the cola wars against Coke was to leverage themselves as the cool, hip, young person's cola, unlike Coke, which was for the lame, broken, hip, old people. That's essentially why they've undergone so many revamps and changes over the years, all in an effort to make sure that they stay number, well, two. Honestly, it's never really worked out for them. Whenever it seemed like they took one step forward, it was three or four steps back. Seriously, the cola wars was all about these two giants duking it out to see which one would reign supreme, but what was a battle of witty marketing and an epic tug-of-war between the two turned into Coke telling Pepsi to stop hitting themselves? I mean, you got famous blunders like Crystal Pepsi, which we've covered, the jet that they were sued for and Netflix made a series about, and the horrible press around the accident with Michael Jackson, where he caught fire during a commercial shoot, and that was all last century. It somehow got worse as time went on. Look no further than 2017's ad starring Kendall Jenner, the commercial that got everyone on the web considering it the worst of all time. Do you realize how hard it is to get the internet to agree on anything? It was taken down in one day, one day. Even YouTube stuck it out more with the 2018 rewind, and this is where Dr. Pepper started gaining momentum against them. Despite being the old man in the game, Dr. Pepper has always made sure to be hip and happening with the trends. In fact, marketing has always been a huge strength of the company. Their slogans dating back to the 70s were always a hit, and when the age of social media came around, they did everything they could to stay ahead of the curve, and if you wanna stay ahead of the curve, the only way to do that is by checking out our sponsor for today's video, NordVPN. Seriously, if you're just relying on the power of optimism to help you surf the web instead of a VPN like Nord, I guarantee you'll have about as good a time as Pepsi's having. You may know that it lets you switch up your IP address by connecting to one of thousands of their secure VPN servers around the globe so that you can instantly access websites and videos that are region locked, but it does so much more than that. 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Get it at nordvpn.com slash Food Theory or click the link in the description below. Now let's get back to it. Around the time that Facebook started really taking off, Dr. Pepper realized they were lagging behind their competitors, so they joined up with an ad agency that changed everything for them. They started to invest way more into social media because they realized that's where most of their consumers spent their time. They have an entire brand newsroom where employees' sole jobs are to sift through social media and see what they can capitalize on, from opportunities for marketing to things that did or didn't resonate with consumers. Unlike PepsiCo and Coca-Cola, which both use in-house marketing teams like most global companies, Dr. Pepper can contribute to trends in real time with their ad agency, as opposed to needing 1,000 meetings to make a joke on a moment that's already passed. Even taking the latest trend to go viral as an example, the pickled Dr. Pepper, they were quick to respond and make their own TikTok to capitalize on the moment and connect with their audience. And this isn't just me talking. Consumers view Dr. Pepper as having a brighter future because of how well they're able to adapt and stay up to date with trends. Meanwhile, Pepsi, the supposed brand for the young generation is doing collabs with the hottest celeb chef of 2008, Bobby Flay. ♪♪ Please make it stop. And it's not only their collabs that have drawn massive question marks, it's their flavors, too. Pepsi's knack for making the weirdest flavors no one asks for is honestly unparalleled. Over the years, not counting their diet versions, Pepsi has released a whopping 42 varieties of their cola. That's 12 more than Coke's 30 and 17 more than Dr. Pepper's 25. But it's not just about the number, it's the actual flavors themselves. Take a look at their s'mores collection. That's right, s'mores. Three different flavors of Pepsi, each one being a different ingredient of the classic campfire treat. You got graham cracker, chocolate, and marshmallow. You were supposed to mix them up to make your perfect s'more. And instead of doing anything Pepsi wanted it to, it just tasted like burnt. Or their salted caramel, which got overwhelmingly bad reviews by customers on Twitter. The list goes on and on. Peeps Pepsi, Pepsi Blue, where the liquid of the Pepsi was literally blue. If that doesn't sound appetizing to you, it didn't to anyone else at the time. The first year of its release, it sold all right while people's curiosities got the better of them, but sales plummeted and it became one of Pepsi's biggest flops. Their problem is they throw everything at the wall to see what sticks without thinking about why they're doing it. Despite centering their whole identity around the younger generation, their flavors come across completely tone deaf to what their audience actually wants. This is where Dr. Pepper and Coke succeeded and yet again, where Pepsi failed. Take the Coca-Cola creations as an example of how to do it right. When they launched in 2022, the mission of these creations was to use technology and pop culture to rope in an audience that's fallen off the sugary soda crates. They let people make AR emojis, used artists from this decade, like Marshmello and Rosalia, and even gave them a taste of what experience points and gains tastes like. Granted, it was League of Legends XP, so it was a bit salty, but clearly it worked for them because it generated $100 million in their first year. Dr. Pepper has been one-upping everyone with their flavors. Their newest one, Strawberries and Cream, made them over $300 million in sales last year. But more than sales, it's where those sales are coming from. The flavor was a collaboration with rapper Young Gravy. Coming from the SoundCloud era of the genre, Mr. Gravy is a social media hit with Gen Z. The TikTok announcing the collab got over 25 million views and the flavor itself spread like wildfire. We're doing the new Dr. Pepper Strawberries and Cream because it's just good by itself. Today, we're trying Dr. Pepper's Strawberries and Cream. That seems to be a strawberry cream cream! Both Coca-Cola and Dr. Pepper went into it with a clear understanding of the audience they wanted to reach. They knew how to appeal to them and the sales reflected all of this while Pepsi was spending a million dollars to make their new logo look like their old one. Really, what this boils down to is brand identity. Coke and Dr. Pepper haven't needed to switch up their look because they've zeroed in on who they're selling to. Coke is so far in the lead when it comes to this race, it's more drink us or don't, your loss, while Dr. Pepper has built their marketing around their drink. It's all about their unique and versatile 23 flavors so they sell themselves as just that, a unique experience for a young consumer looking to mix things up and everything they do is in service of that. Hop on quick to social media trends, bring out flavors their customers actually want, and even sponsor college football so that students are exposed to their brand from every angle. And Pepsi just gets hit with hesitation and mockery more often than not with their moves. It just can't catch a break. The entire company can't catch a break. This entire time, we've been talking about Pepsi Cola, but all of PepsiCo's beverages have been taking a beating too. Gatorade, for example, has been the dominant brand in the sports drink field for, well, ever. But now Prime is starting to catch up and take over more of the market. This year, it topped Gatorade as Walmart's most sold hydration drink. Even though Gatorade is still comfortably in the lead, it's starting to feel the pressure of actual competition. And speaking of competition, it'll get even stiffer when Lionel Messi, the soccer god, releases his sports drink later this year. Rockstar, Pepsi's energy drink, has also been seeing declines. Even Celsius, Pepsi's ticket into the healthy energy drink market, exploded on the scene, but is cooling off quick after only two years. Every major drink that they make has seen better days. And if it seems like Pepsi stopped trying, it's because it has. Despite the beverages being on the downswing, remember that PepsiCo still remains number two behind Coca-Cola. But that has less to do with the Pepsi and more to do with the Co. See, the other half of the company is in the food business, and it's called Frito-Lay. Yeah, pretty much every single chip, dip, cracker, or pretzel you've had is owned by Pepsi Co. Their beverages still make up 42% of their revenue, but the rest, that comes from Frito-Lay. It's the most profitable division of the entire company. Plus, unlike the soda business, which hasn't stopped seeing decline, the food and snack business is still growing. And they're pretty much the only name in the game there. So PepsiCo is naturally starting to shift their focus more to that part of the company, even looking at food trucks and other snack-centric experiences for customers. With how much money Frito-Lay brings in, it makes sense that they would start to invest less in the beverages that are being hit with stiff competition and a declining industry. What we're seeing with Pepsi and Dr. Pepper may be the first step in a long line of PepsiCo quietly bowing out of the Cola Wars and just coasting by on whatever they end up with in that market. Same with Gatorade and their other beverages. And they're not too worried, because meanwhile, they keep dominating a more profitable and growing industry. So now you know why Dr. Pepper's victory spells the end for Pepsi. Because for once, it seems like they're getting out of their own way. It'll still be around. Obviously, it's still half of the name after all. Well, for now. Who knows, maybe in 10 years, we'll have to get used to calling it FritoCo instead of PepsiCo. But hey, that's just a theory, a food theory. Bon appetit. If you like this video and wanna see more, make sure to go check out our video on Pepsi's logo or our episode on their Navy. Yeah, a Pepsi Navy. And I'll see you next week.