When it comes to soft drinks what’s your favorite? I think it is obvious that many people still prefer Coca Cola to Pepsi. It maintains the status of being the market share leader.
But is this the same situation with Wall Street? Apparently not! Wall Street happens to be an entirely different story. Pepsi evidently, has beaten Coke for the past few years in terms of who is number one on the market and it doesn’t seem to be a phase as it looks like that trend won’t end anytime soon. Pepsi accounted for sales and earnings that topped Coca Colas. In addition, it also boosted its outlook too, which is a bonus for Pepsi.
The Pepsi stock popped 1.5%. The stock is now up nearly 10% this year. In contrast, Coke’s stock is down 2%. If Pepsi’s stock persists to rally, it may not be long before the corporation maintains more value than Coke. Pepsi’s market value is at this time more than $155 billion, about $25 billion less than what Coke is worth.
Significantly, Pepsi concisely topped Coke’s market value in the mid-late 2000s. But Coke has traditionally held an appealing and bulky lead over its competition and arch nemesis. Furthermore, it appears as though that may not last. As Bob Dylan would sing, “the times they are a changing,” and Dylan has the eye right on the money.
Mutually, Coke and Pepsi are trying to adapt to changing consumer tastes. When it comes to products, it is all about what the people want. With Pepsi, they are trying to appeal to Millennial and Gen X nostalgia with the reintroduction of its Crystal Pepsi clear soda.
But, lets be realistic both high-calorie soft drinks and diet beverages are falling out of favor, since people are trying to be healthier. Consumers aren’t dumb. They are wise enough to figure out that diet sodas aren’t exactly healthy given the chemicals that are in them. In addition, the amount of sugar, which can lead to health issues like diabetes.
Seemingly, carbonated beverages are falling out of sight to consumers to energy beverages, juices and water. Water is obviously the healthiest choice. Coke and Pepsi each have a existence in these markets. Coke owns Minute Maid, Dasani and Powerade. In addition, it is the most prevalent shareholder of Monster Beverage. With Pepsi, it owns Tropicana, Aquafina and Gatorade. But in addition, Pepsi also has a prosperous snacks unit, an expansion area that has permitted the company to challenge and beat Coke.
Pepsi’s Frito-Lay division, which consists of the namesake Fritos and Lay’s brands of chips, Doritos, Cheetos and Cracker Jack, is sustaining solid development in sales and earnings as of recent.
The revenue for Pepsi’s food business are extremely appealing to investors. Even though Frito-Lay accounts for just a little more than 20% of the company’s total sales, the division makes up more than 40% of Pepsi’s working profits.
Fascinatingly, consumers still seem to love salty snacks even though they may be drinking more water and energy drinks and less soda. It’s hard to resist salty snacks, plus even those that try to stay away from them have their cheat days.
The Frito-Lay unit recently partnered with Burger King, whose parent company is backed by Berkshire Hathaway and its bold junk food lover CEO Warren Buffett — to launch Cheetos Chicken Fries.
Since we’ve been discussing so much about the comparison and battle between Pepsi and Cola I thought it would be good to draw in some statistics from Brandon Gaille. When comparing sales Coca Cola exceeded the sale of 1 million gallons in 1904. Pepsi saw bankruptcy twice in 1923 and 1931. In terms of growth, Coke became a registered trademark in 1945 and went public in 1962, Pepsi claimed franchises in 24 states in 1910. And lastly, in terms of pricing Coke’s first price increase was in 1946, ending the decades long $0.05 coke. Pepsi doubled bottle size in 1933 for same $0.05 price.
