Ben Gilbert

Pricing power isn't really a thing that's exercised in this industry if it exists at all.

Coke clearly has branding power, but...

But rather than taking price, they keep price low and use their latent brand power in other ways.

I mean, the funny thing is when they sell a Coke, they're selling a billboard.

And so there's this flywheel element, too, where they want to sell as much Coke as possible, not just to keep their manufacturing costs low because it's an economies of scale thing, but also because one more Coca-Cola floating around in the world just reinforces the brand.

I think this is the best interplay we've ever seen between branding power and scale economies, where the way that they've built a lot of the brand that they have is through their scale economies, and they sort of go back and forth.

I'll tell you, you can't measure their brand power through how much more expensive it is than Pepsi because that doesn't exist.

You can sure measure it, though, with the outcry against New Coke.

Switching costs?

I don't think I have any real switching costs.

Sometimes I do have to drink a Diet Pepsi or a Pepsi Max and like, it's fine.

It's not my preferred drink, but it's fine.

Yep.

Network economies?

None.

No.

Process power?

Maybe, but it's hard to discern from the outside.

But I'll tell you, it's not the formula itself.

It is all of the meaning imbued into the formula that is actually a part of their branding power.