Blog: Chris Brook-CarterSoft drinks bubble

Chris Brook-Carter | 4 August 2005

It’s been a quiet six months for the soft drinks industry.

It’s almost as if the sector, and in particular Coke and  Pepsi, has been keeping its cards close to its chest ahead  of the crucial summer months across the US and Western  Europe. The coming weeks promise to be some battle.
 
The fight proper began two weeks ago with news of  PepsiCo’s strong showing in its second quarter results.

Reports that these figures represented the demise of chief  rival Coca-Cola were premature, however, with the red  giant beating Wall Street estimates a week later, with  good growth internationally and a stabilisation in North  America.
 
“The company emphasises that it is premature to declare  victory versus its various external and internal  challenges (eg, lack of carbonated soft drink growth in  North America, optimising innovation), but we take this as another quarter demonstrating that new CEO Neville Isdell  has begun to effectively transform Coke and restore its  capacity to grow,” said Mark Swartzberg, beverage analyst  with Legg Mason, in a research note.
 
The pace of news has picked up considerably since. There  are reports of a Brazilian juice buy for Coke, whilst Pepsi just can’t shake free of those Danone rumours. And  ahead of us we have potential legal battles over the  launch of a Coke product called Ipsei, the speculation of  the sale of Cadbury Schweppes European drinks business, let alone all the new products and advertising campaigns  ready to launch in all the major markets.
 
This rivalry has so many interesting battles to play out  in the next few months that after a relatively dry period,  the next quarter should quench any thirst you have for  action in the sector. 


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