In 2025, former President Donald Trump’s reinstated tariff policies sent unexpected ripples through the global soda industry. While the headlines focused on macroeconomics and global trade, a subtler war was brewing — one between two titans: Coca-Cola and PepsiCo. But unlike previous battles over ad campaigns or celebrity endorsements, this quiet conflict is about something far more fundamental:
Cans or bottles.
This seemingly trivial packaging choice is now at the center of a deeper strategic divergence shaped by tariffs, supply chains, environmental pressures, and brand positioning.
The Hidden Weight of Tariffs
Trump’s latest round of tariffs has two major consequences for beverage companies:
- A 25% tariff on imported aluminum
- A 10% tariff on soda concentrate imported from Ireland
For PepsiCo, this is a double blow.
- Much of its concentrate for the U.S. market is produced in Cork, Ireland
- The company relies heavily on canned soda in the U.S., amplifying the impact of aluminum tariffs
By contrast, Coca-Cola produces its concentrate domestically (notably in Georgia and Puerto Rico) and leans more heavily on PET bottles — avoiding both major cost increases.
Source: Beverage Digest, WSJ
Bottles vs. Cans: Cost Cuts and Climate Criticism
To offset rising input costs, Coca-Cola has accelerated its shift toward PET bottles. CEO James Quincey said in February 2025, “If aluminum prices rise, we’ll lean into plastic.”
While this helps reduce costs, it invites a different kind of pressure — environmental backlash.
- Plastic packaging is under growing scrutiny from environmental groups
- Coca-Cola’s goal of using 35–40% recycled content by 2030 is behind schedule, with reports suggesting a delay to 2035
So while Coca-Cola dodges tariffs, it faces reputational risk. In contrast, PepsiCo is absorbing more immediate cost impacts, but avoids becoming the face of plastic pollution.
Same Bubbles, Different Games
Despite competing in the same carbonated market, the two companies are playing vastly different strategic games:
| Coca-Cola | PepsiCo |
|---|---|
| Classic, globally unified branding (e.g., Coca-Cola, Sprite) | Culture-driven campaigns (e.g., sports, music collaborations) |
| Focus on beverage-only portfolio | Diversified across beverages and snacks (e.g., Frito-Lay, Gatorade) |
These differences are not just branding decisions. They shape how each company absorbs economic shocks and regulatory shifts.
Beyond Bottles and Cans: Business Model Resilience
Understanding the full impact of tariffs requires looking at each company’s structure:
| Metric | Coca-Cola | PepsiCo |
| Revenue (2024) | ~$47.1 billion | ~$91.8 billion |
| Business Focus | Beverages only | Beverages + snacks |
| Soda Revenue Dependence | High | Relatively lower |
While Coca-Cola’s business revolves around its soda empire, PepsiCo benefits from diversification. Its snack division (notably Frito-Lay) cushions financial shocks, making its business more resilient to fluctuations in a single product category.
Cracks in the Cola Duopoly
U.S. soda market share in 2023 (by volume):
| Company | Market Share (%) |
| Coca-Cola | 19.2 |
| Dr Pepper | 8.34 |
| PepsiCo | 8.31 |
| Others | 64.15 |
Surprisingly, Dr Pepper edged past PepsiCo — a minor shift, but a symbolic one. The rise was fueled in part by the popularity of low-sugar options, reflecting broader shifts in consumer behavior.
Source: Beverage Digest
Conclusion: Soda Is Sweet, but the Competition Is Bitter
Tariffs may not alter what’s inside your can of cola, but they’re changing the game behind the scenes:
- Cans vs. Bottles
- Domestic vs. Foreign supply chains
- Narrow vs. diversified business portfolios
These “quiet choices” are redrawing the industry’s competitive landscape. It’s not a loud marketing war — it’s a structural divergence shaped by policy, cost, and sustainability.
The soda aisle may look the same, but the strategic split between Coca-Cola and PepsiCo is growing deeper with every tariff.
And in this new phase of the Cola Wars, it’s clear: Soda is still sweet — but the competition is bitter.
