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Exploring the Soda Pain Point

Coca-Cola (KO), PepsiCo (PEP) and Dr. Pepper Snapple Group collectively announced a move to reduce the â??number of beverage calories per personâ? nationally by 20% by 2025.

Earlier this week, following the Clinton Global Initiative, Coca-Cola (KO), PepsiCo (PEP) and Dr. Pepper Snapple Group collectively announced a move to reduce the â??number of beverage calories per personâ? nationally by 20% by 2025. Now, that doesnâ??t mean the companies are altering their beverages, even though they are doing that as well, but rather that they will be selling smaller soda portions — think 10-ounce cans instead of ones containing 12 ounces — and bringing more alternative beverage products (water, juices and so on) to market.

At a time when headlines are filled with the toll of rising obesity rates and the impact not only on the populationâ??s health, but also the rising costs associated with it, consumption of both regular and diet soda has been falling. Sales of non-diet soda have fallen by 15% since 1998, given the shift toward lower-calorie diet beverages, but more recently, sales of diet soft drinks also have started to decline. The combined effect is resulting in overall soft drink volume declines like the one evidenced in PepsiCoâ??s June quarter results — its North America, non-carbonated beverage volume grew 1% and carbonated soft drink volume declined 2%.

Read more about the soda pain point and its repercussions at Eagle Daily Investor.

Written By

Chris Versace is a financial columnist and equity analyst with more than 18 years of experience in the investment industry. He has been ranked an All Star Analyst by Zacks Investment Research and his efforts in analyzing industries, companies and equity securities have been recognized by both Institutional Investor and Thomson Reutersâ?? StarMine Monitor. Heâ??s frequently published in The Washington Times and is a frequent contributor to the daily radio show â??Americaâ??s Morning Newsâ? and â??Americaâ??s Radio Newsâ?. He has been quoted in the Wall Street Journal, Investorâ??s Business Daily, The Street, USA Today and other publications. In addition, he can be frequently seen on televisionâ??s â??Fox Businessâ? show.

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Exploring the Soda Pain Point

Earlier this week, following the Clinton Global Initiative, Coca-Cola (KO), PepsiCo (PEP) and Dr. Pepper Snapple Group collectively announced a move to reduce the “number of beverage calories per person” nationally by 20% by 2025. Now, that doesn’t mean the companies are altering their beverages, even though they are doing that as well, but rather that they will be selling smaller soda portions — think 10-ounce cans instead of ones containing 12 ounces — and bringing more alternative beverage products (water, juices and so on) to market.

At a time when headlines are filled with the toll of rising obesity rates and the impact not only on the population’s health, but also the rising costs associated with it, consumption of both regular and diet soda has been falling. Sales of non-diet soda have fallen by 15% since 1998, given the shift toward lower-calorie diet beverages, but more recently, sales of diet soft drinks also have started to decline. The combined effect is resulting in overall soft drink volume declines like the one evidenced in PepsiCo’s June quarter results — its North America, non-carbonated beverage volume grew 1% and carbonated soft drink volume declined 2%.

Read more about the soda pain point and its repercussions at Eagle Daily Investor.

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