Marriott Is Finally Ditching Pepsi After 34 Years — Coca-Cola Takes Over Nearly 10,000 Hotels

Coca-Cola is replacing Pepsi as Marriott’s exclusive beverage provider across their global system of over 9,800 properties and nearly 1.78 million rooms in 145 countries and territories, replacing a relationship that has been in place since 1992. The changeover across 450 million room nights begins this summer.

Nobody thought Pepsi was better when Marriott went exclusive with them in 1992. They got the better financial deal when Coke refused to provide $50 million to $100 million in below-market loans, with the beverage giant internally describing Marriott as asking it to become a “banker.”

• If Marriott is scoring 5 cents per room night off this deal that translates to $22.5 million, not even counting restaurants, bars, lobby markets, meetings, banquets, pool outlets, and vending.

• There’s going to be some combination of lower syrup pricing, volume rebates, equipment support, branded coolers and fountains, marketing funds, and potentially direct payments.

This is great news. People prefer Coke. The worst thing about Marriott’s acquisition of Starwood may not even have been sunsetting Starwood Preferred Guest – it’s arguably the imposition of Pepsi products.

Pepsi did revive it’s ‘Pepsi Challenge’ over the past year, claiming that 66% of participants preferred Pepsi Zero Sugar over Coke Zero Sugar in its tests. There’s a literature about the “Pepsi Paradox” where blind tests gave the nod to Pepsi while Coke maintained real-world branded preference. That always seemed just like the difference between first sip and sustained drinking, with Pepsi’s too-sweet taste becoming cloying and undrinkable the more you taste.

Marriott told hotels that the Coca-Cola portfolio is favored by more than 70% of Marriott’s guests. And the truth is that people almost universally ask for Coke and not Pepsi. Everyone serving at a Pepsi-exclusive venue asks sheepishly, “Is Pepsi ok?” Pepsi tried to turn this into a positive, but it just underscores the truth – Pepsi is a disappointment.

Customers actually do steer away from Pepsi-exclusive companies at the margin, although there’s little direct evidence showing airline and hotel choice at scale driven by beverage selection. It certainly drives volume and overall product satisfaction.

On one of the few times a year that I have a sode, it’s probably Dr. Brown’s with deli food but I’ll also have a Coke with an inflight burger. (If it’s Pepsi on offer, I’ll just have water thanks.)

JetBlue is Pepsi-exclusive, in a current deal that dates to 2019. Fortunately, Delta, American, United, Southwest, Frontier, Spirit, and Allegiant all serve Coke products.