Blog: Soft drinks going soft?
Chris Brook-Carter | 12 July 2004
US bottler stocks have been strong performers of recent times, as the market anticipates earnings momentum deriving from an inflationary US economy and increased price leadership by the market leader, the Coke system.
So it was interesting to receive a research note from Legg Mason last week, casting some doubt on the sector's performance going forward.
The note considered whether revenue momentum for carbonated soft drinks will sustain in 2005. It did so against a backdrop of what have become widely-held market expectations of increased revenue momentum in 2004.
"We do not expect category revenue momentum to sustain in 2005 due to positive but slowing price realisation. In principle, this is a risk to bottlers' earnings growth given the low-margin nature of bottling," said Mark Swartzberg, Legg Mason's beverage analyst.
Swartzberg went on to explain that the leading regulator of rates of sector price growth is broad rates of inflation, or consumers as a group, not competitive unity or disunity.
Correspondingly, if economic forecasts are right, further inflation in 2004 will be
followed by a slowdown in inflation in 2005, suggesting a slowdown in revenue growth for carbonated soft drinks, Swartzberg said.
A couple of months ago, US-based Saltwater Brewery developed 'edible six-pack rings' in an effort to curb threats to wildlife....
Last month, SPI Group unveiled its latest advert for Stolichnaya in the US. Its an amusing little number that caries the instruction: Drink what you want. The “I am man” ad looks to distance Millennia...
Who do you work for? I ask, merely to draw your attention to just-drinks’ company pages....
This weekend sees yet another “International Day” for a drinks category. Lucky us. Anyway, ahead of Sunday’s International Cachaça Day, here’s a wealth of information on Brazil’s national spirit, cour...
- Diageo's Q4/FY 2016 results - Preview
- Wine consumption and its health effects
- Can craft breweries compete in lager arena?
- The Coca-Cola Co's Q2/H1 2016 results - Preview
- A Wild Geese, Pernod Ricard conspiracy theory?
- Diageo names new TR head as Doug Bagley exits
- AB InBev seeks single buyer for European beers
- Gruppo Campari trials Negroni pre-mix
- Scotch drop hits Edrington as FY profits fall
- AB InBev raises SAB cash offer by GBP1 per share
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends