Blog: Soft 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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