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Analysis - PepsiCo off pace as The Coca-Cola Co sparkles

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Concerns about PepsiCo's beverage business remain, an analyst has warned, as Q1 volumes lagged rival The Coca-Cola Co.

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In first-quarter results, announced today, the snacks and drinks maker reported a 3% increase in global beverage volumes, or just 1% on an organic basis. Meanwhile. Coca-Cola, which posted its Q1 results on Tuesday, saw beverage volumes increase by 4%.

Wells Fargo analyst Bonnie Herzog said: “PepsiCo delivered decent Q1 results, but we remain concerned about the health of the beverage business.

“A 1% global volume growth in beverages reflects continued underperformance versus Coca-Cola.”

Herzog also highlighted a 3% volumes drop for the PepsiCo Americas Beverages unit, led by “mid-single digit” declines in the CSD category. Coca-Cola reported a 1% drop in its Q1 North America sparkling beverage volumes, while in Latin America sparkling beverage volumes were up by 2% in the quarter. 

On Tuesday, Coca-Cola announced planned changes to its US bottler system that are intended to lower expenses and stimulate growth in CSDs.

PepsiCo, meanwhile, is putting faith in new sweetener and flavour innovations to “reinvent” the struggling category. Today company CEO Indra Nooyi said she intends to treat CSDs “very carefully”.


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