Analysis - Coca-Cola Co price cuts turn heat on PepsiCo
PepsiCo has seen volumes pressure in North America
Wells Fargo's Bonnie Herzog said in a note today (25 July) that PepsiCo must prove its integrated snacks and drinks model “does more than simply subsidize ongoing weakness in North American beverages”. The beverage unit also saw negative pricing as PepsiCo followed a promotions strategy that Herzog said has offset volumes declines.
However, she added: “This strategy may fall apart if Coca-Cola maintains its heavy promotions, which we suspect could accelerate PepsiCo volume declines and lead to the acceleration of negative top-line growth.”
In Q3 results released yesterday, PepsiCo posted an increase in profits and sales, however gains mostly came from snacks and international sales, while North American beverages faced “ongoing challenges”, Herzog said.
The warning follows pressure from PepsiCo investor Nelson Peltz for PepsiCo to hive off its beverage unit and operate it as a separate company. Peltz last week said PepsiCo's structure “just doesn't work any more”, while yesterday PepsiCo CEO Indra Nooyi suggested the company is to announce structural changes early next year.
Stifel analyst Mark Swartzberg said today that the changes are only likely to affect PepsiCo's North Amercian beverage unit and not alter its global structure.
As we welcome in the New Year, we invite Euromonitor to cast its eye over what 2014 holds for the drinks industry. In the first part of this month's management briefing, the global market research and...
Ahead of the Oscars, due to be handed out in just over a month's time, Richard Corbett has some gongs of his own to hand out. In recognition of the best new soft drinks products in 2013, who will win ...
PepsiCo has launched a patent claim in Russia over its Russkiy Dar kvass brand....
- Six key trends for alcoholic drinks in 2016
- Aus wine industry pays price for past failures
- Ten things to know about spirits in the US
- Will value-sharing in Travel Retail become reality
- What's in store for Super Bowl 5 - Focus
- SABMiller hits back in UK corporation tax row
- William Grant & Sons restructures US team
- Diageo's Orphan Barrel The Gifted Horse - NPD
- American rye whiskey sales leap 600% in five years
- Moet Hennessy sees China rebound in strong FY
- What Next for Beer and Brewers Following the MegaBrew Deal?
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global Beer Trends 2015 : Global Beer Trends and Long-term Forecasts
- Global Whiskey Market 2016-2020
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research