Comment: Pepsi fizzing up the Mexican soft drinks market

By | 21 November 2001

PepsiCo is in talks to buy Mexican soft drinks maker Jugos del Valle.

PepsiCo is looking to expand its presence in Mexico through buying the leading manufacturer of fruit juices, purees and fruit drinks. Should
PepsiCo succeed, this could act as a springboard for other players to enter the market and bring about an increasingly competitive environment.

With many of the more attractive soft drinks targets in the US already
having been snapped up, PepsiCo is spreading its acquisition web beyond US
borders. As the world's largest per head consumer of soft drinks, Mexico
offers many advantages for soft drinks manufacturers.

The Mexican market has been less lucrative for PepsiCo in the past than it
might have hoped, with the beverage giant holding a paltry 20% of the
market. The world's second-largest soft drinks company is keen to claw back
some of the ground it has lost to Coca-Cola, which currently claims a market
share of around 70%.

Jugos del Valle would be a prize scalp for PepsiCo, and is seen as an
aggressive response to the recent decision by Femsa, Latin America's largest
beverage company that acts as an anchor bottler for The Coca-Cola Co. in
Latin America, to enter soft drink production through its purchase of Mundet
beverage brands. Jugos del Valle is highly regarded in Mexico, with a strong
brand name and a broad juice product portfolio regarded as its key
strengths.

Should PepsiCo be successful in adding to its Mexican portfolio, it is
thought that the acquisition would prompt Modelo, Mexico's biggest brewer,
to reassess its recent decision to eschew the Mexican soft drinks market.

The precise impact of this increased competition is hard to assess at this
stage, but would surely result in lower margins and a harsher manufacturer
environment.

View next/previous articles

Currently reading -

Comment: Pepsi fizzing up the Mexican soft drinks market

There are currently no comments on this article

Be the first to comment on this article

Related articles

Pepsi challenge shows no sign of faltering

In the battle of the giants, PepsiCo has stolen a march on Coca-Cola over the last year or so and its performance in the first half of the current fiscal year suggests it is still has the upper hand. Chris Brook-Carter analyses PepsiCo's recently published second-quarter results and looks ahead to the rest of the year.

US: Pepsi hands ex-exec US$4.5m package

A departing PepsiCo executive is to be handed a US$4.56m package spread over the next two years for his consultancy services.

US: Pepsi Bottling to acquire Pepsi Charlotte

The Pepsi Bottling Group has signed a letter of intent to acquire Pepsi-Cola Bottling Company of Charlotte (Pepsi Charlotte) for an undisclosed sum.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page