The Cola Wars: How Coke and Pepsi's Feud Rewired Consumer Psychology

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In 2006 a Coca-Cola executive secretary named Joya Williams and two accomplices offered the company's trade secrets to Pepsi for $1.5 million. Pepsi called Coca-Cola, then the FBI, and undercover agents posing as rogue Pepsi executives closed the trap. That moment of honor between enemies opens a history that starts with two Southern pharmacists: John Stith Pemberton, who created Coca-Cola in Georgia in 1885, and Caleb Bradham, whose North Carolina syrup Brad's Drink became Pepsi-Cola in 1898.

From there the fortunes split. Coke built an identity out of the contour bottle and Santa Claus, while Pepsi went bankrupt in 1923 and again in 1931 and survived by selling 12 ounces for a nickel. This episode tracks the rivalry through the Pepsi Challenge of 1975, the New Coke panic of 1985, the celebrity arms race of the MTV years, and the modern stalemate in which Powerade fights Gatorade and Dasani fights Aquafina in every cooler.

• During its bankruptcy years Pepsi offered to sell itself to Coca-Cola, and Coke declined twice, a miscalculation compared here to Blockbuster passing on Netflix.
• The Pepsi Challenge was tilted by biology: in a single sip the brain favors the sweeter drink, and Pepsi is slightly sweeter with a sharper citrus profile.
• New Coke launched in April 1985. Less than three months later, in July, the company apologized and brought back the original as Coca-Cola Classic.
• In January 1984 pyrotechnics went off early during a Pepsi shoot at the Shrine Auditorium and set Michael Jackson's hair on fire. He donated the $1.5 million settlement to a burn center.
• A Pepsi Stuff commercial joking that seven million points could buy a Harrier jet led a college student to demand one and sparked the Leonard v. Pepsico lawsuit.