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The Trump administration’s newly imposed tariffs are reshaping the competitive dynamics between Coca-Cola and PepsiCo.
Due to its reliance on importing key concentrate ingredients from Ireland, Pepsi is now facing an approximately 10% increase in product costs. In contrast, Coca-Cola, which sources a larger portion of its concentrate domestically within the U.S., has been able to absorb much of the tariff impact, thereby maintaining a relative pricing advantage.

The tariffs are also affecting beverage packaging. With tariffs imposed on aluminum, the cost of canned beverages is expected to rise. Coca-Cola is exploring options such as shifting more production to plastic bottles to mitigate the impact.
In a price-sensitive consumer market, these developments are likely to add more pressure on Pepsi’s competitiveness.

Pepsi had already been losing U.S. market share for decades, and recently lost its second-place position to Dr Pepper. Although Pepsi maintains manufacturing facilities in Texas, Uruguay, and Singapore, its heavy dependence on Irish-sourced concentrate leaves it vulnerable to ongoing tariff risks.
Independent bottlers are also raising concerns about rising production costs, further dimming Pepsi’s chances of reclaiming market share.

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