Question: In the domestic soft drink model, is it winner take all, or is there room for three competitors?
Buffett: Sure, there’s room for more than one. I think Coke’s market share will grow pretty much year after year. We’re talking tenths of a percent, but tenths of a percent are important. The U.S. market is 10 billion cases, so one percent is 100 million cases. It’s interesting how regional tastes can be: Dr. Pepper may have a far bigger market share in Texas than in Minnesota … You can make money with a soft drink company that doesn’t dominate the business. You can do a lot better with one that does dominate, but it’s not winner take all. It’s not like two newspapers in a town of 100,000 or 200,000. There are certain businesses that are winner takes all.
Source: 1997 Berkshire Hathaway Annual Meeting