I’m not sure how obsessive you are as a person. Perhaps you electing to read this article should tell me that “at least a little bit” is the answer.
So, you might have noticed the uptick in Coca-Cola product advertisements around campus: the Coke Zero food truck at football games, the Coca-Cola branded phone wallets being handed out at orientation, and pop-up Coca-Cola taste tests in dining halls. This isn’t to claim that the advertising effort is completely new to FSU; it is merely that its efforts have increased this year.
Claiming that Coca-Cola advertises a lot isn’t interesting in and of itself, though. It’s like pointing out that the sky is blue. Understanding what makes this interesting begins with giving pause to the soda selection at any vendor on campus: Diet Coke, Coke Zero, Coke, Sprite, Minute Maid Lemonade, Hi-C, Powerade, and Dr Pepper. Wait…Dr Pepper?
Coca-Cola owns every drink on the lineup except for Dr Pepper. Keurig Dr Pepper owns Dr Pepper (guess what other company they own). As you probably already surmised, all these vendors on campus have so many Coca-Cola products because FSU has a contract with Coca-Cola; more specifically, this is called a pouring contract.
Most pouring contracts — like the one that FSU has — are not legally completely exclusive, but their function essentially makes them that way. The soda company the university partners with promises things, such as a financial athletic sponsorship. However, they’ll receive a virtual soda monopoly at the school’s shops and restaurants in addition to the normal profit schema. It turns out to be a pretty good deal for both parties.
Before we understand why Dr Pepper is the sole exception, it’s important to recognize the latent reason these kinds of contracts exist in the first place: the Coke-Pepsi rivalry.
For almost four decades, Coke and Pepsi were engaged in marketing warfare the likes of which we’d never seen. This was because they were both fighting for the number one soda spot (which Coke has definitely won). An outcome of this war actually ensured a competitive advantage for both Pepsi-Cola and Coca-Cola because both companies made bottling manufacturers sign exclusive contracts with one of the two companies, excluding smaller sodas not part of either conglomerate. But now, Pepsi isn’t America’s second most popular soda…Dr Pepper is.
So, let’s get this straight. FSU has a semi-exclusive pouring contract with Coca-Cola, Coca-Cola has a history of fighting their biggest competitor ruthlessly, and Dr Pepper just became their biggest competitor. Nonetheless, FSU still serves Dr Pepper on campus. This begs the question, as per Coca-Cola’s contract, why is Dr Pepper served on campus?
This could have something to do with Dr Pepper’s uniqueness.
In 1963, Pepsi-Cola took Dr Pepper to court for infringing on its trademark, claiming that the “pep” in Dr Pepper rang too close to Pepsi. The courts denied Pepsi’s claim and substantiated Dr Pepper’s claim that Dr Pepper isn’t even a cola; it’s something different entirely.
The Pennsylvania district court determined that while Pepsi-Cola and Coca-Cola make cola sodas, Dr Pepper makes pepper sodas and is legally classified as the sole proprietor of pepper cola manufacturing worldwide. This means that not only was Dr Pepper not stepping on Pepsi’s toes, but it couldn’t even be claimed that they were taking the prior art because they made two completely different categories of sodas.
Another thing that makes Dr Pepper unique is the way it legally maneuvered their manufacturing situation. Since 1963, Dr Pepper has been a pepper soda, making it much easier for them to break into manufacturing contracts that bottling plants held exclusively with Coca-Cola or Pepsi-Cola during the most intense parts of the Coke-Pepsi war.
Dr Pepper never made themselves seem like a cola competitor to the two giants; they were a completely different type of soda that wanted to share manufacturers. However, they also never sold to either entirely; they still today are their own company. They happen to license out manufacturing to whichever of the two companies is most lucrative in a certain area.
Tying in intellectual property and contract law, the way that Dr Pepper presented to the public during the Coke-Pepsi war starts to make more sense. If you look at the messages that Coke and Pepsi marketing campaigns send to consumers, they generally focus on one-upping each other.
Campaigns honed in on blind taste tests, proving one was better than the other and calling the competitor by name in advertisements. They were clearly fighting amongst each other. On the other hand, Dr Pepper focused its campaign on making consumers feel like they were part of something different; the center of the marketing was on being “part of an original crowd.”
So, why does Coca-Cola let Dr Pepper tag onto their semi-exclusive pouring contract with FSU even though Dr Pepper looks like their biggest competitor? Probably because of Dr Pepper’s uniqueness. By and large, Pepsi has fallen by the wayside for the number two soda spot because they lost the Coke-Pepsi war.
But Dr Pepper, a company making nationwide sales of $15 million next to Pepsi’s $174 million and Coke’s $537 million in 1961, is now right next to Coke. However, Coke doesn’t view rapid ascendance as the same kind of threat as Pepsi because Dr Pepper is in a different category legally and in the American mind.
I venture to say Dr Pepper did this by virtue of originality. Not the uniqueness of the product itself but the way Dr Pepper presented itself to the giants and the world of consumers. Its complex legal classification and clever manufacturing plan set the stage for a shared soda kingdom with Coca-Cola at FSU.
Perhaps this is a lesson to us all: in a world of colas, be a pepper.
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