Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Monster Beverage Corp (MNST), The Coca-Cola Company (KO): Will an Energy Drink Ban Impact the Soda Market?

Page 1 of 2

Editor’s Note: The original article stated the AMA would get behind a ban on energy drinks; this is incorrect. This article has been amended and Motley Fool apologizes for the error.

Shares of Monster Beverage Corp (NASDAQ:MNST)s fell recently as energy drinks continue to undergo scrutiny by government officials. The American Medical Association announced a discussion of a resolution to ban energy drinks for those under 18, leading many to wonder what would happen to these companies if the resolution was adopted.

Monster Beverage Corp (NASDAQ:MNST)

Until recently, Monster Beverage Corp (NASDAQ:MNST) was a great stock for investors, reporting a 6.5% increase in net profits for its first quarter. At that time, Monster Beverage Corp (NASDAQ:MNST) held a 32.7% share of the market, beaten only slightly by Red Bull, which held 35% of the market.

Soda market down

The news was dismal for the soda industry earlier this year as energy drinks continued to push them to second place. When PepsiCo, Inc. (NYSE:PEP) announced its quarterly earnings, sales were down for the third year in a row. Net income for the company was down $1.08 billion from $1.13 billion the previous year.

At the same time, sales of energy drinks have risen, jumping 14.3% in 2012. Including more caffeine than coffee, the drinks are especially popular with young people, leading to the health concerns making headlines today.

The concerns have become so prevalent that medical professionals and health organizations are now asking the U.S. Food and Drug Administration to regulate energy drinks. This comes on the heels of an increase in emergency room visits due to the drinks, says the Associated Press. For energy drink specialists like Red Bull, tight regulation or a full-out ban could spell the end. But for companies like PepsiCo, Inc. (NYSE:PEP), it might just be the push that consumers need to return to regular carbonated beverages.

The Coca-Cola Company (NYSE:KO): Still on top

Not one to be outdone, The Coca-Cola Company (NYSE:KO) released its Full Throttle energy drink in 2004. But the drink has never quite caught on like its competitors, holding only 1.28% of the energy drink market despite aggressive advertising.

The shift toward energy drinks doesn’t seem to have phased The Coca-Cola Company (NYSE:KO), however. Consistently one of the best-performing brands in the world, The Coca-Cola Company (NYSE:KO) sales have grown 10% over the past five years. The Coca-Cola Company (NYSE:KO) builds its brand by never relaxing its marketing strategy. The company continues to bombard the public with advertisements, with its ads becoming a part of American culture. As a result, Interbrand named it the world’s most valuable brand in 2011.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!