The Pepsi Challenge has been an ongoing marketing promotion run by PepsiCo since 1975. It is also the name of a cross country ski race at Giant's Ridge Ski Area in Biwabik, Minnesota, an event sponsored by Pepsi.
The challenge is designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are identical drinks, with no meaningful differences. The challenge takes the form of a taste test. At malls, shopping centers and other public locations, a Pepsi representative sets up a table with two blank cups: one containing Pepsi and one with Coke. Shoppers are encouraged to taste both colas, and then select which drink they prefer. Then the representative reveals the two bottles so the taster can see whether they preferred Coke or Pepsi. The results of the test leaned toward a consensus that Pepsi was preferred by more Americans.
In the early 1980s, Pepsi ran a contest which would hand out a large prize to anyone who could gather Pepsi bottle caps that spelled out "challenge". Each cap had a single letter beneath it. The letter "A" was the rarest, making it appropriately difficult to win the prize.
In his book, Blink, author Malcolm Gladwell ascribes the success of Pepsi over Coca-Cola in these tests to being a result of the nature of "sip tests", which would fail to account for the cloying effect of excessive sweetness and glutamate and the complimentary but counter-intuitive long-term preference for an item that would consistently lose in a blind sip-test comparison.