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Pepsi and Coke: a sweet spat betwixt lovers

Many love stories stand the test of time, but this one on its own class. Sugary giants PepsiCo and Coca-Cola have been in a relationship for ages.
If you think they are at war, think again. Coke and Pepsi are what you call eternal lovers. Two similar strong entities entwined in forever competition. They try to come up with new ideas to up one another but end up sharing it at the end. Their market shares widening by the quarter, and both of them contributing to each other’s growth… if this ain’t true love, what is?

 

Remember the Cola Wars? (Pic Courtesy: haggismac on Flickr)

Take the latest sparkling-water race, for example…
Coca-Cola recently acquired popular sparkling water brand Topo Chico for $220 million. And now we have a new line of sparkling water from PepsiCo called “bubly.”

Now they both have two new brands, more products, and yes, more flavored water for the masses.

Do you remember the brutal ad campaigns the two beverage giants pulled in the ’90s? YouTube it! One after the other, our TV screens lit up with funny ads showing the rival brand down. In the end, everyone knew both the companies. Both the brands benefitted. Classic lover’s spat.

 

PepsiCo earnings
PepsiCo posted its fourth-quarter earnings one day before Valentine’s day. The giant posted a flat revenue of about $19.5 billion, with a net loss of $710 million or $0.50 per share.

While many might assume it was the competition, PepsiCo’s results were heavily impacted by Trump’s tax reforms, with a one-time charge of $2.5 billion.

While the tax act seems to be a wedge through the hearts of these lovers, the Lays chips parent expects lower taxes in the remainder of the year. It’s like your very own happily ever after, innit?

The Pepsi Line-up (Courtesy: PepsiCo)

 

Coca-Cola on Friday
Come Friday; the other half Coca-Cola will post its results. We are likely to see an impact on its revenues due to its divested bottling operations, something that is expected to continue till 2019.

We also need to look out for the impact of Trump’s tax reforms.

 

Third Wheel
While Coke and Pepsi are enjoying this love-hate relationship, more entities are joining the party.

The recent acquisition of Dr. Pepper Snapple by Keurig for $21 billion is likely to have some consequence on the beverages market. How the dynamics of this story will change, is yet to be seen.

Meanwhile, let’s all grab a Coke or Pepsi and share all this happiness this Valentine’s day. 

PepsiCo Q4 2017 Earnings Snapshot

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