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.
Finally. A rare win at Bonvoy. My preferred over-priced carbonated sugar-water is now in their refrigerators. Saved. Free at last. Praise be to… Thank you for your attention to this matter.
Air Canada just went all Pepsi – I booked my next flight on United.
I prefer Coke products, and the hotels in Georgia and Utah I frequented both business travel always kept an unauthorized stash of cokes for frequent guests.
Good move.
@Doug — Kinda surprised Utah offered caffeinated beverages… lest we upset LDS.
Outstanding news. Pepsi and Starry have always seemed queer to me, and not in a good way.
@UA-NYC (posing as 1990) – if you ever got out of your elitist NYC bubble, you’d know mormons drink cold caffeine (yeah it doesn’t make sense but it’s true)..
“No Pepsi! Coke!”
I don’t drink sports drinks anymore but I used to prefer Gatorade over Powerade. Probably the one thing Pepsi has over Coke.
@BonvoyedAgain — Nah, I don’t use other aliases on here. @UA-NYC is someone else. Besides, it’s the folks in Queens (Long Island City) with their big Pepsi Cola neon sign along the East River.
As for the Mormons… anyone else remember Gary’s Neeleman commentary back in the article about the drunk pilot a while back? @L737, it’s a bit of a callback. (And you’re right about Gatorade).
At last, it’s been so long. I can’t really remember when there’s been unequivocally good news about the Marriott chain that affects my travel travels.
100% on the Dr. Browns & Deli. If Coke is looking to make an acquisition, that would be my choice. And agree with everything said in this article. Coke is a big win for Marriott customers.
BEST NEWS in years! I hate Pepsi.
And I cannot count the number of Marriotts I’ve seen with Coke in the gift shop!
And employees who have told me that they hate the sickly Pepsi.
Now if I could only get rid of my acid reflux… too many business trips. Upside is I have maximum permanent status on Marriott and American Airlines.
OK, I’ll be odd poster out. Diet Pepsi for me, all the way.
Really sad to see this change, though less sad than I was when Costco did the same thing last year.
@Gary —> “…Delta, American, United, Southwest, Frontier, Spirit, and Allegiant all serve Coke products.” So does Alaska.
@Denver Refugee: “Cheeseburger, cheeseburger, chesseburger, Pepsi, Pepsi, Cheeseburger. No Coke! Pepsi! Cheeseburger, cheeseburger…..”
Can’t imagine the (Pfft ) sophisticated readership still drinking and of these unhealthy beverages
Another nail in Marriott’s coffin. I drink Mountain Dew, after a Delta flight and Coke only airports, being able to get a Dew was a major benefit from Marriott.
@1990 — Nice one! We’re going to need bigger callback jar.
I also think I prefer Dasani over Aquafina.
Two observations:
(1) Prior to this current turn of events, there was at least one major Marriott hotel in Atlanta that served Coca Cola products and they made a big deal about it. Atlanta is the headquarters for the Coca Cola corporation and I suspect this “exception” was necessary to get Coca Cola to patronize Marriotts in Atlanta for corporate events and visitors. (I’m not guessing about this – it was told to me by the particular hotel manager!)
(2) Dr. Brown’s? Gosh that brings back memories. Gary, you show your background. Dr. Brown’s started in New York City (and environs) and its most famous (if not only!) flavors were/are cream, ginger ale, black cherry, root beer, and Cel-Ray. (Unfortunately, Dr. Brown’s discontinued the Diet Cel-Ray soda a number of years back although some of us are trying to get it back.) It was typically the most popular soda served in kosher delis. What is Cel-Ray tonic you may ask? It is soda (i.e., seltzer water, “2 cents plain”) flavored / infused with celery seed – it is absolutely NOT a drink for all occasions. The best way to describe Cel-Ray tonic is that it is an “in-mouth meat marinade” that is especially useful and refreshing when eating kosher delicatessen meat such as pastrami, corned beef, and tongue. (No, it isn’t for ham sandwiches or white bread!!!)
First good news from Marriott in two decades.
Horrible news for those of us who prefer Mt. Dew. Marriott just took a big hit on my in-hotel beverage purchasing!
Buying the business it seems. Oh and I prefer Diet Pepsi over Coke Zero or Diet Coke. Not everyone likes coke.
So, Gary thinks nobody thought Pepsi was better than Coca-Cola in 1992. How is Coca-Cola ‘better’? Does Gary have no memory of the 80s and 90s when Pepsi marketing was at its peak?
Taste? It wasn’t only Pepsi’s taste tests that favored Pepsi, but also Coca-Cola’s that led to their ill-fated formula switch in 1985. Wait, Gary says, taste is different when you take small samples of soda than when you drink a whole can. More scientific evidence from brain studies shows that the reason Coca-Cola is preferred in non-blind tests is confirmation bias.
Though Usual Suspects stated the devil’s greatest trick was convincing the world he didn’t exist, Coca-Cola’s is that it is a superior beverage without bringing taste into the discussion. It cannot be contested that Coca-Cola’s marketing is absolutely superior, and if Gary had read between the lines, he would have picked up on the phrase “data-driven” in the Marriott letter, indicating that Coca-Cola was likely to have come up with a data set to argue that customers make hotel choices based on whether Coca-Cola Classic is on tap. Could it have been the number of Reddit posts where the same group of people moans incessantly that you can’t have Jack and Coke with Pepsi? I don’t know.
As Coca-Cola increasingly makes these arguments to major channels (warehouse clubs, hotels, cruise lines), I have decided I need to abstain from paying $4+ for soda I don’t like. I’ll base my hotel choice on whether they have water bottle fountains. Since I am old enough to remember when Pepsi was the choice of a new generation, and Marty McFly and Ray Charles touted Pepsi, it is probably better for my health.