Cola Wars Heat Up as Elliott Pushes Pepsi to Copy Coke’s Winning Formula

Sometimes the best strategy isn’t reinventing the wheel — it’s copying the one that’s already rolling. PepsiCoPEP

finds itself under pressure from activist investor Elliott Investment Management, which has taken a ~$4B stake and wants the beverage behemoth to follow Coca-Cola’sKO

playbook. This push comes as PepsiCo shares have fizzled ~20% over two years while Coke bubbled up ~90%, highlighting a growing performance gap that’s left investors thirsty for change.

• PepsiCo’s North American drinks business runs at 11.2% margins vs. Coke’s 28.5%, underscoring the stark difference between asset-heavy and asset-light models.
• The iconic Pepsi-Cola brand has slipped to fourth place in US soda sales, trailing Dr PepperKDP
  and Coca-Cola’s Sprite in a reversal of fortune.

The prescription seems clear: Both companies bought back their bottlers 15 years ago, but while Coca-Cola later spun them back out, PepsiCo kept its bottling operations in-house — a decision that’s haunted margins ever since. Now, Elliott’s remedy involves shedding sluggish brands like Quaker and spinning off bottling to jump-start results. The stock trades at 17x forward earnings, compared to Coke’s 22x — a discount that reflects the cost of clinging to a model that no longer works.