Just like answering the question of which soft drink tastes better, who has better marketing is up for debate as well. See the following Information Box for a discussion. Year-to-date, Coca-Cola shares have been much stronger, increasing nearly 12% in value and easily outpacing PepsiCos share return of 0.6%. Instead of focusingspecifically on the beverage market, PepsiCo has specifically and intentionallyexpanded into other consumable markets: Though historically associated as a beverage/soda company, more than 50% of PepsiCo's business revenue is generated through its snack product. Track recent dividend declarations and get ready for upcoming payouts. The Motley Fool has a disclosure policy. Find other companies that have increased their dividends for more than 25 consecutive years, in our 25-year dividend increasing stocks page. To make the world smarter, happier, and richer. Coke is valued at about twice PepsiCo's price-to-sales ratio of 3, in fact. Great! Coca-Cola and Pepsi dominate the $200 billion global soft drink and bottled water manufacturing industry. Both companies have healthy balance sheets and generate lots of cash, but a lack of growth is cause for concern. 3 Tonka's. CarDekho Success Story - How It Finds the Right Cars for the Users? In fact, Pepsi did launch Diet Pepsi. Coca-Cola continued to top Pepsis yearly sales going forward. Grilling Musk: use CEO's tweets, thin skin against him, trial experts say, Feds Beige Book shows signs inflation is slowing, but job market remains tight, Big Tech braces for dismal profits, more job cuts, Apple wants to control everything from its chips to screens, US STOCKS-Wall St stumbles after weak data, hawkish Fed comments. Brand equity refers to the value a company gains from a product with a recognizable and admired name when compared to a generic equivalent. Coca-Cola has won again !! Lorem ipsum dolor sit amet, consectetur adipiscing elit. The Difference in Cola Branding I believe that where Coca Cola have succeeded and Pepsi have failed, is with their For over 100 years, Coca Cola have used the same logo. Both figures are down slightly, compared to unusually high results a year earlier. A 0.3% difference isn't enough for me to give Pepsi much of an edge in terms of projected EPS growth, so I'll call it a draw here. Coca-Cola International Wells Fargo Business Financial Services 500 stock market index fund accounted for 35% of the companys total shareholder return, while all other B.U.s combined only accounted for 15%. Coca-Cola commands a larger market presence in the carbonated soft drink area. "It smells like marzipan," said one tester with a particularly keen nose. Though PepsiCo generated more income in 2021, Coca-Cola remains the more valuable brand name. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. PepsiCos debt doesnt cripple the company. Build conviction from in-depth coverage of the best dividend stocks. Both KO and PEP have served their shareholders well over the past several decades with their commitment to continuously paying and growing their quarterly dividends. Not sure where to start? Both Coca-Cola and Pepsi have internationally recognizable brands, though each attempt to market to different product lines. Investopedia does not include all offers available in the marketplace. One can contain Pepsi and the other Coca-Cola. The resulting ad that came out in 1984 featured the King of Pop singing "You're the Pepsi generation. Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Still, Wall Street expects Pepsi to increase its earnings per share at an annualized rate of 7.54% over the next five years,fueled by continued growth in its Frito-Lay snacks business. Moreover, snack foods -- particularly healthier options -- represent a large and steadily growing market opportunity. The weighted average cost of capital is calculated taking into consideration the relative contribution of these sources towards company's overall structure. . John Pemberton developed a cola syrup. Pepsi Interpret the results of your EVA calculation. Lastly, currency fluctuations affected net sales negatively because of the strong U.S. dollar, which was a significant factor in the decline of PepsiCos revenue from both North America and the Asia Pacific. has reduced its outstanding share count by more than 10% annually through a combination of stock buybacks and cash dividends. Check out our Best Dividend Stocks page by going Premium for free. Both have expanded into the energy drink market which has continued to grow. PepsiCo typically prices its goods based on consumer demand and demographics. Our picks from the +200 dividend stocks paying a monthly dividend. Pepsi and Coca-Cola are two of the most popular and widely recognized beverage brands in the world. Africa, Middle East, and South Asia (all products in Africa, Middle East, and South Asia). PepsiCos largest markets are located in North America. Hi, Im John Lau, the funder of iBottling.com, Ive been working in a factory in China that makes beverage equipment for 16 years now, and the purpose of this article is to share with you the knowledge related to beverage equipment from a Chinese suppliers perspective. Exclusive insider of the beverage industry. Coca-Cola is also the more capital-light business -- Pepsi's capital expenditures were twice that of Coca-Cola in the past year. PEPs more diversified lineup of food products has helped soften the blow of declining soda sales. All told, with its broader product diversification, greater dividend coverage, and more attractively priced stock, Pepsi is the better buy today. We also reference original research from other reputable publishers where appropriate. KO is primarily a beverage business, but PEP generates around half of its sales from food brands such as Doritos, Frito Lay and Quaker Foods. Here's the Stock to Buy Now, A Bull Market Is Coming: 2 Remarkable Growth Stocks to Buy Hand Over Fist in 2023, Join Nearly 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, large and steadily growing market opportunity, Copyright, Trademark and Patent Information. PepsiCo Beverages North America (beverages in the United States and Canada). Coca-Cola (K.O.) Coca-Cola and PepsiCo are both multinational beverage companies. Success! If you have anything interesting to share on our site, reach out to us at. From water treatment to beverage filling, we offer solutions for small and large companies alike. Check out the dividend history of Coca-Cola here and Pepsi here. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. For more than a century and traveling different paths, both these companies have created a niche for themselves. Those dividends appear well supported with billions in free cash flow generated annually. Knowing your investable assets will help us build and prioritize features that will suit your investment needs. Save my name, email, and website in this browser for the next time I comment. A business savvy executive at the company designed a bold and revolutionary strategy and called it The Pepsi Challenge'. PEP is ahead in that regard, but KO introduced 500 new products globally in 2016. Dividend investors still favor KO and PEP stock for their above-average yields and strong growth history. Your account is fully activated, you now have access to all content. Perhaps just as impressive as their streak of consecutive dividend increases is the rate at which KO and PEP have grown their dividends. Coca Cola Vs. Pepsi: Story Behind War & Marketing Strategies Coke has a long history of partnerships with major fast food chains, such as McDonald's and Burger King, while Pepsi has focused more on partnerships with entertainment companies, such as music festivals and sporting events. But Pepsi went a step further. One major difference between the two brands is their target audience. Coca-Cola expects its cash flow production to improve in the years ahead, so this may not be much of an issue, but it's enough for me to give Pepsi the edge in terms of financial fortitude. Instead of diversifying across the food, snack, and beverage industries, Coca-Cola has concentrated on building out an empire of drinks. PepsiCo has created a diverse product line of complementary goods across the food and beverage industries. Everyone has their own taste. Quickest stock price recoveries post dividend payment. Case volume from all channels. Health-centric beverages like Tropicana, niche cross-market products like Lipton, and heavily saturated products like Pepsi are all priced differently based on the underlying customer group. Coca-Cola competes with PepsiCo internationally, though Coca-Cola approaches its market segmentation differently. For these reasons, I'd argue that Pepsi has the edge in terms of competitive positioning. Pepsi has traditionally positioned itself as a young and hip brand, with a focus on younger consumers. Success! The investments Coca-Cola made to improve its productivity have allowed them to be more efficient than PepsiCo when serving its customers and has also helped them lower costs. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. *Average returns of all recommendations since inception. Frito-Lay has 80% of the snack food business- a formidable barrier to entry. It would take years to try and break into that areaCoca-Cola has no food experience. So everything is liquid based. Food processing wouldnt be a lateral addition, it would be an entirely new line.Coca-Cola has mastered liquid delivery. From processing to delivery to ads. Hi, my name is John Lau but you can call me JL. We are a carbonated beverage filling machine manufacturer that exclusively sells high-quality goods to all of our customers. Coca-Cola is the international leader in beverages, while PepsiCo has a stronger brand presence in the snack and food industry. However, there are also key differences between how the two businesses operate. Have we mentioned how wonderful our client service is? These include white papers, government data, original reporting, and interviews with industry experts. You've successfully signed in. It also takes a more direct pricing strategy by analyzing consumer demand and setting prices accordingly. Coca-Cola and Pepsi have diversified their beverage product lineups in response to these trends. Coca-Cola was the first to be created by Dr. John S. Pemberton in the early 1800s. Coca-Cola has a strong presence in almost every country in the world, with a particularly strong market share in emerging economies. Coke also pays a slightly higher dividend yield today. As two of the prime consumer products in modern civilization, Coke and Pepsi have come to epitomize perhaps the central feature of all advertising, which is to provide the forum for placing social values and attitudes on a plane with material ones be they goods, services, or money. "Coca-Cola Reports Fourth Quarter and Full-Year 2021 Results. If you like the taste of Pepsi over Coca-Cola, you're in the minority. Their advertisement campaigns have been on an equal footing, be it creating catchy jingles to audience-engaging television promotions. Worth $125.3 billion in 2020, the sugar-free carbonated drink market is expected to reach $243.5 billion by 2030. How Coca-Cola Stacks up Against New Entrants. The term was coined in the early 1980s to describe the competitive advertising, marketing, and sales tactics of Coke and Pepsi to develop and maintain market share. Pepsi is an industry price maker, setting its own product rates in accordance with customer demand. Using a data-driven approach, the program will provide you with a global mindset capable of operating globally as well as in a variety of national environments. ", Sure Dividend. Over the years both companies have sponsored a slew of major sporting events. A relationship and a rivalry ingrained in the culture that predates the 20th century. PepsiCo typically prices its goods based on consumer demand and demographics. They walked inside the malls around the country and invited people for a blind taste test. The advertising campaign also plays off of the seemingly long-disputed perception that Coke tastes best at McDonald's and engages consumers in a whole new way. Pepsi Zero Sugars tweaked formula comes about a year after debuted a refreshed Coca-Cola Zero Sugar recipe. And with each company's stock Although PepsiCo already had a strong brand image, they wanted to improve it, so they created marketing campaigns such as Pepsi Refresh and Project Blue. Let's now take a look at some key financial metrics to see how Coca-Cola and Pepsi stack up. Quaker Foods North America (cereal, rice, pasta in the United States and Canada). As Americans become more concerned with sugar, chemicals, and the sustainability of packaging, the operations, product lines, and pricing of both companies will be impacted. Your email address will not be published. Its flagship beverage items accounted for $35 billion of that figure ($12 billion was from Frito-Lay products). Pepsi This case study discussion is about branding. Coca-Cola vs. Pepsi's Business Models: An Overview, Brand Equity: Definition, Importance, Effect on Profit Margin, and Examples, Product Life Cycle Explained: Stage and Examples, Vertical Integration Explained: How It Works, With Types and Examples, Product Lines Defined and How They Help a Business Grow, Coca-Cola Reports Fourth Quarter and Full-Year 2021 Results, PepsiCo Reports Fourth Quarter and Full-Year 2021 Results; Provides 2022 Financial Outlook; Announces Annual Dividend Increase and New Share Repurchase Program, PepsiCo Brands: All 23 Billion Dollar Brands Explained, "PepsiCo Reports Fourth Quarter and Full-Year 2021 Results; Provides 2022 Financial Outlook; Announces Annual Dividend Increase and New Share Repurchase Program. This cash has helped support the development of new products and the annual dividend. I am sure the ad puts a big smile on Pepsis and Coca-Colas fans' faces worldwide. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. Here's the Stock to Buy Now, A Bull Market Is Coming: 2 Remarkable Growth Stocks to Buy Hand Over Fist in 2023, Join Nearly 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. Two brands is their target audience site, reach out to us at frito-lay. But you can call me JL other reputable publishers where appropriate find other that... More income in 2021, Coca-Cola shares have been much stronger, coca cola vs pepsi sales 12! Here and Pepsi have internationally recognizable brands, though Coca-Cola approaches its market segmentation differently in the.. Dapibus a molestie consequat, ultrices ac magna and Canada ) accounted for $ 35 billion of figure! The relative contribution of these sources towards company 's overall structure risus ante, dapibus a molestie,. 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