Sodastream International Ltd (SODA), PepsiCo, Inc. (PEP): It Is All About Planning Right

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The Coca-Cola Company (NYSE:KO) has recently acquired the European juice brand Innocent, which will significantly increase its exposure in the juice segment. This is turning out to be a winner for the Cola king as Innocent has reported a whopping 36.6% rise in sales value in 2012.

In the non-carbonated segment PepsiCo, Inc. (NYSE:PEP) also has cult brands like Gatorade and Tropicana in its portfolio. It witnessed a 2% overall growth in beverage volumes in the fourth quarter. The company has recently launched its new “breakfast drink,” Kickstart. This is an energy drink variant but with lower caffeine content.

PepsiCo, Inc. (NYSE:PEP) is more insulated from the declining soda sales in the US on account of its thriving snack foods business. It saw a 4.5% volume growth in its snacks business which is more than double its beverages growth. Again the company has cult brands like Lays and Quaker which are driving sales.

Way ahead
Growing health concerns like obesity, heart problems are discouraging Americans to drink soda and sale of fizzy drinks are falling. However, the US is a great soda drinking nation with the world’s highest per capita consumption of 165 liters annually. Thus there is huge market lying open in the US alone for the likes of Sodastream International Ltd (NASDAQ:SODA) who promises the same soda experience at almost one-third the calories.

The company is well aware of this potential and playing its card right. It is slowly increasing its penetration of the US markets with innovative products and flavors. At the same time it is also building a global brand by exploring more and more markets across the world.

Eshna De has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, PepsiCo, and SodaStream. The Motley Fool owns shares of PepsiCo and SodaStream.

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