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New Cola War: Pepsi and Coke's Latest Weapons

Pepsi Max and Coke Zero
Pepsi Max and Coke Zero

Remember the "Pepsi Challenge"?

Coke or Pepsi?—It used to be a question up there with boxers or briefs and McDonald'sorBurger King. But the Cola War intensity in this iconic rivalry has been noticeably missing the last few years.

Until now.

Pepsi is throwing its marketing weight behind Pepsi Max. Its high-caffeine, zero-calorie beverage that's aimed directly at the same consumer that could also gravitate to rival Coke Zero.

"The cola wars are one of the great stories... in American business..." -Beverage Digest, John Sicher

In a new ad campaign, Pepsi is trying to reignite the competition between Coca Cola and Pepsi with the focus on the zero-calorie space. (You can watch video of Pepsi commercial here.)

John Sicher, editor of industry trade newsletter Beverage Digest says, it's about time.

"The 'Cola Wars' are one of the great stories not just in American business history, but consumes love the Cola Wars," he said. "They love the competition between Coke and Pepsi. There hasn't been enough of good old Cola War advertising and marketing recently.

"Pepsi using the Cola Wars as a strategy to help build Pepsi Max is a really good way to go."

These two drinks are considered by many to be "diet sodas for guys". Coke Zero has been in the US market for about five years. Pepsi Max actually has a longer history—just not in the United States. It was introduced in the UK about 17 years ago, and is actually a billion-dollar brand globally. However, it's only been on American store shelves for three years.

Right now, both brands have a small, but growing market share. Although soda sales in the U.S. have struggled with increased competition and health awareness, zero-calorie products have remained appealing.

Pepsi tells CNBC that the goal is to spread the message that Pepsi Max fits the proverbial bill. Pepsi needs to gain ground agains Coke as Coke Zero leads Pepsi Max in terms of case volume by a ratio of 5-to-1.

"Pepsi felt that consumers didn't understand what Pepsi Max stood for—that it didn't understand that it didn't have zero calories," Sicher said.

With growth in the carbonated beverage business difficult to find, the new battleground in the Cola Wars seems to be Coke Zero vs. Pepsi Max.

Questions? Comments? Email us at consumernation@cnbc.com

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