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...
While PepsiCo has lost ground to Coca-Cola in some HW soft drinks categories, including RTD tea, bottled water and carbonates, PepsiCo is in a much stronger position in HW packaged foods. The company’...
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 ...
In 2012, Cía de Bebidas Pepsico continued to adapt to the gloomy economic climate by holding back prices, offering its core carbonates brands at lower retail prices than its main competitor Cía Servic...
Ranked sixth in hot drinks in 2012, the company has a strong presence in other hot drinks, in particular in chocolate-based flavoured powder drinks under the Toddy brand. Competing for the same target...
PepsiCo China Ltd is seeking sustainable growth by enhancing brand awareness around the world and bringing innovative products to the marketplace....
- A-B InBev's Move on Tennent's Super Makes Sense
- Analysis - Stock Spirits: Poland's number one
- What's on the M&A cards for San Miguel Brewery?
- Brand Diversification Driving Craft Brewery Growth
- Comment - Wine - Not on the List
- Pernod Ricard's Café de Paris Pear, Pomegranate
- PepsiCo CEO sees "profound" change in US consumers
- William Grant & Sons boosts Travel Retail team
- First Drinks becomes William Grant UK
- William Grant sinks GBP185,000 into "No" camp