Pepsi vs. Coke -- the new cola wars are here

Pepsi vs. Coke — the new cola wars are here

Creating a better capitalism that thinks long term

Get prepared for a new spherical of cola wars! Or let’s say tea, water and natural beverage wars?

Pepsi reported its newest outcomes Thursday. And although it acknowledged “challenges” in its US soda enterprise, Pepsi posted strong gross sales progress in North America from Lipton and Pure Leaf, LifeWTR and Kevita kombucha and probiotic cleaning drinks.

The firm additionally posted robust beneficial properties in beverage gross sales from China, India, Brazil and different worldwide markets and a rise in income from its Frito-Lay snack enterprise, which owns Doritos, in addition to its Quaker model of oatmeal and cereal.

All that added as much as a stellar quarter for Pepsi (PEP), which reported gross sales and income that topped Wall Street’s forecasts. The inventory rose almost 1% on the information.

Pepsi’s outcomes come simply two days after its prime rival Coca-Cola (KO) additionally reported better-than-expected gross sales and revenue, led by the fist enhance in quantity from the Diet Coke brand in North America in additional than seven years.

Coke lately rolled out 4 new Diet Coke flavors that it clearly was focusing on to Millennials — issues like Ginger Lime and Feisty Cherry.

Related: Diet Coke’s new flavors are a big hit

So how will Pepsi reply to Coke’s newfound Diet Coke success? Chief monetary officer Hugh Johnston mentioned in an interview with CNNMoney that Pepsi can also be engaged on “some things with flavors” for the core Pepsi manufacturers, which he described as a “work in progress.”

But Johnston mentioned its “innovation strategy” — working to develop extra non-soda drinks — is paying off too. He pointed to the launch of the firm’s new bubly model of glowing water, for instance.

The glowing water class is pink scorching due to the success of the LaCroix model that is owned by National Beverage (FIZZ). Coke is making an attempt to achieve a foothold on this market too. It lately purchased the US rights to Mexico’s Topo Chico band.

Pepsi additionally lately unveiled Tropicana Coco Blends, pineapple and peach ardour fruit drinks that even have coconut water. There’s additionally a new line of natural Tropicana juices for youths that haven’t any added sweeteners or synthetic flavors.

But Johnston added that different core Pepsi drinks are getting a new push as effectively. He mentioned the firm has significantly excessive hopes for its new Gatorade Zero, a model of the sports activities hydration drink that has no carbohydrates.

“Gatorade Zero is going to be a big winner,” Johnston mentioned.

Pepsi additionally simply rolled out Mtn Dew Ice, a transparent lemon-lime taste. Pepsi promoted it in a Super Bowl advert with Morgan Freeman and Missy Elliott that paired with a new advert for Doritos Blaze starring Peter Dinklage of “Game of Thrones” and Busta Rhymes.

Related: How fruit juice got boxed out of the health craze

Johnston mentioned Pepsi elevated its advert price range in the first quarter, and he famous that Coke did as effectively. That development ought to proceed. Pepsi is trying to spend extra on advertising for each its soda manufacturers in addition to non-carbonated drinks like tea.

And Pepsi is doing so extra on-line as effectively. Johnston mentioned 30% of the firm’s advert spending is now on digital platforms. That proportion has gone up steadily over the previous few years and will hold doing so.

So the Coke vs. Pepsi battle is certainly again on. But it is now enjoying out on Google, YouTube, Facebook and Instagram in addition to TV.

CNNMoney (New York) First revealed April 26, 2018: 11:40 AM ET



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