Why aren’t Coke and Pepsi sold together at restaurants?
Posted March 12th, 2009. Categorized under Miscellaneous. 9 Comments
“We don’t have Pepsi. Is Coca-Cola okay?”
Coca-Cola
At just about every restaurant you go to, the main soft drink is always Pepsi or Coca-Cola — restaurants never offer both. We rarely think about why this is — why are the two most popular soft drinks never sold together?
But why not sell both drinks? The Coke drinkers could order a Coke, and the Pepsi drinkers could order a Pepsi. Wouldn’t it make sense for restaurants to offer both?
From your point of view, yes, this would make more sense. But not from the restaurant’s point of view.
You see, restaurants sign contracts with the beverage companies in order to receive and sell the soft drink. Restaurants receive additional benefits when they decide to be exclusive. In return for not selling the competitor’s product, the soft drink give restaurants a greater share of the profit, more discounts, and free stuff. Sometimes the soft drink vendors will even pay for the electricity needed to keep the drinks cool.
Pepsi holds about 30% of the fountain drink market
Restaurants who choose to sell drinks from more than one company will not receive these benefits. These restaurants figure that they will receive more benefit from the soda companies than from offering you a greater choice. For example, if a customer prefers Coca-Cola but only Pepsi is offered, the customer is likely to settle with Coca-Cola. The restaurant, however, earns greater profits than it would by offering both drinks.
Supermarkets and other such stores, however, benefit more from selling both products, since people will come in particularly for a specific drink and would shop elsewhere to buy that drink.
Due to the benefits restaurants receive from selling exclusively Coke or Pepsi, when you go to restaurants you’ll find that restaurants rarely sell both.
And since a Coke versus Pepsi post wouldn’t be complete without asking the inevitable question…
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1. Anonymous Prime
March 13th, 2009 9:40 am
Pepsi Challenge 2009!
Let’s also not forget that in certain markets, Pepsi (or Coke) naturally sells better so it makes more sense to sell that product to people who are already gonna buy it.
I didn’t know about the perks like paying for the chilling cost. learn something new every day.
Anonymous Prime’s latest post: March 14th = Steak and BJ Day