According to Consumer Reports, in the 1970s, the rivalry has heated up the market. Pepsi conducted blind taste tests in stores, in what was called the “Pepsi Challenge”. These tests suggested that more consumers preferred the taste of Pepsi (which is believed to have more lemon oil, and less orange oil, and uses vanillin rather than vanilla) to Coke. The sales of Pepsi started to climb, and Pepsi kicked off the “Challenge” across the nation. This became known as the “Cola Wars”. In 1985, The Coca-Cola Company, amid much publicity, changed its formula. The theory has been advanced that New Coke, as the reformulated drink came to be known, was invented specifically in response to the Pepsi Challenge. However, a consumer backlash led to Coca-Cola quickly reintroducing the original formula as Coke “Classic”.
According to Beverage Digest’s 2008 report on carbonated soft drinks, PepsiCo’s U.S. market share is 30.8 percent, while The Coca-Cola Company’s is 42.7 percent. Coca-Cola outsells Pepsi in most parts of the U.S., notable exceptions being central Appalachia, North Dakota, and Utah. In the city of Buffalo, New York, Pepsi outsells Coca-Cola by a two-to-one margin. Pepsi-Cola commanded only a slight lead over Diet Coke in 2009, when each brand had slightly less than a 10% market share among carbonated soft drinks. That year, regular Coke won the cola wars with a 17% market share, according to Beverage Digest, a trade publication and data service. Sales of Diet Coke overtook those of Pepsi-Cola for the first time in 2010, making the diet soda the No. 2 carbonated soft drink in the country behind Coca-Cola. Occupying the top two rankings would mark a historic win for Coca-Cola Co.in its decades-old rivalry with PepsiCo Inc., which has seen its market share slip in recent years and is trying to retool its marketing.