Why is the battle between Coke and Pepsi -- two ultimately similar types of sugar water -- the most important struggle in the history of capitalism? Simply put, their rivalry transcends time, distance, and culture.
It has divided restaurants, presidents, and nations. It has been waged in supermarkets, stadiums, and courtrooms. Its many foot soldiers include Santa Claus, Cindy Crawford, Michael Jackson, Max Headroom, Bill Gates, and Bill Cosby.
In 1886 an Atlanta chemist introduced Coca-Cola, a tasty "potion for mental and physical disorders." Pepsi-Cola followed seven years later, though it would be decades (and two bankruptcies) before Coke acknowledged the company in the way it had other competitive threats: lawsuits.
Pepsi-Cola had made hay during the Depression. Like Coke, the drink cost a nickel, but it came in a 12-ounce bottle nearly twice the size of Coke's dainty, wasp-waisted one. But by the 1950s, Pepsi was still a distant No. 2. It nabbed Alfred Steele, a former Coke adman, who arrived embittered and ambitious. His motto: "Beat Coke." Coca-Cola refused to call Pepsi by name -- the drink was "the Imitator," "the Enemy," or, generously, "the Competition" -- but it began tinkering with its business (and imitating Pepsi) to stay ahead.
In 1979, for the first time in the rivalry's history, Pepsi overtook Coke's sales in supermarkets. It didn't last, and by 1996, Fortune declared that the cola wars had ended. Since then Pepsi, with its increasing focus on health and snacks, has as good as surrendered. America's favorite two soft drinks? Coke and Diet Coke.
Seven tales of competition that changed business forever. Available free to subscribers on Fortune's tablet apps.