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...
The G8 Soft Drinks industry guide provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2008-12, and forecast to 2017). The guide al...
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....
- Are we about to see a no-alcohol Heineken?
- American whiskey does a vodka - Analysis
- Battle continues for Pernod Ricard in US and China
- A-B InBev's Global Presence - just The Facts
- Concha y Toro's H1 performance - Focus
- Craft more about stories than M&A for Diageo
- The Glenlivet leapfrogs Glenfiddich
- Diageo readies "not quite as sincere" Scotch
- Heineken integrates cider and beer
- “New normal” sees Pernod target premium in China
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Pernod Ricard SA - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report
- Global rum insights - market forecasts, product innovation and consumer trends research
- Brown-Forman Corporation (BFB) - Financial and Strategic SWOT Analysis Review