The Latest News in the Beverage Industry: Coke, Pepsi, SodaStream, Del Monte, and Ford
Over the past couple of weeks, some news involving beverage companies Coca-Cola and PepsiCo , homemade soda system maker SodaStream , fruit company Fresh Del Monte , and car manufacturer Ford came across the Web that you may find of interest and provide valuable insight into the beverage industry.
When you look to the distant future you may think of food and beverage replicators or transporters seen on Star Trek: The Next Generation. You may also think of darker concepts of genetically engineered soldiers bent on taking over the world. According to an interview with India news outlet Live Mint cited in Beverage Daily, Coca-Cola's chief technology officer Guy Wollaert believes that genomics will provide the means to produce beverages tailored specifically to our own genetic makeup. He believes that technology will make the measurement of health metrics more precise and personal, translating into more individually tailored products.
In other innovative news, over the past few years Coca-Cola has used a green technology in its plastic bottles comprised of recycled material and plants. According to an article in USA Today, Ford and Coca-Cola teamed up to produce a seat fabric for its cars made out of the same material. Ford created a prototype "Ford Fusion Energi plug-in hybrid" that contains "seat cushions, seat backs, head restraints, door panel inserts and headliners" containing the new material. The article claims that it would put a dent in the usage of plastics, gasoline, and oil. It's interesting how two unrelated companies can come together on an environmental goal.
SodaStream has struck up some interesting partnerships with the likes of large companies such as Kraft Foods and Campbell Soup. Now it plans to partner up with fruit seller Fresh Del Monte to produce carbonated versions of its fruit syrups. According to fellow Fool Rick Munarriz, this represents Fresh Del Monte's first foray into carbonated beverages. He also points out that SodaStream needs new innovation to counter disappointing syrup sales, which actually declined 3% in the United States. SodaStream, like the rest of the carbonated soda business, faces increasing headwinds from the healthy-lifestyle movement. Right now ,new partnerships can go a long way in boosting consumer interest.
Apparently all of the negative press about the Mexican Coca-Cola bottler Arca Continental switching from cane sugar to fructose had the fans of "Mexicoke" worried, according to an Associated Press article. To their relief, "Mexicoke" will retain its flavor. Apparently people enjoy Mexican Coca-Cola due to its taste that harkens to the day before the switch to corn syrup back in the 1980s. This goes to show you that not all Coca-Colas are created equal.
Both Coca-Cola and PepsiCo announced major expansion plans into emerging markets over the past couple of weeks, according to Bloomberg. Coca-Cola plans to invest $4 billion in China from 2015 to 2017. This probably represents a wise move, considering that China only consumed 39 servings per capita last year. Coca-Cola also wants to cater its beverages locally to increase consumer appeal in China.
PepsiCo plans to invest more than $5 billion in India. PepsiCo lost market share there in carbonated soda beverages over the past five years, going from 40.1% in 2007 to 36.4% last year, according to Bloomberg. By contrast, Coca-Cola gained market share during the same period, going to 60.9% versus 57% five years ago. According to a CNBC interview cited in Beverage Daily, PepsiCo CEO Indra Nooyi said that India can accommodate both PepsiCo and Coca-Cola, and that any rivalry talk is "irrelevant."
In the latest blow to the hopes of die-hard soda fans everywhere for a carbonated renaissance, an article from Beverage Daily highlights sharp declines in soda consumption among people under the age of 35 in Australia. The articles also talks about at least some decline in soda consumption among all age groups in the country. Moreover, among carbonated users, the quantity of consumption continues on a downward trend, with the exception of the older set.
Even in the potentially lucrative emerging markets, political leaders faced with rising health care costs stemming from obesity want to raise soda taxes to combat the problem by putting a friction on soda demand and raising funds for health programs to reduce societal burden. Investing in big soda companies like Coca-Cola and PepsiCo or even the fast-growing SodaStream may not represent the sure bet it once was.
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The article The Latest News in the Beverage Industry: Coke, Pepsi, SodaStream, Del Monte, and Ford originally appeared on Fool.com.Fool contributor William Bias owns shares of Coca-Cola and Kraft Foods. The Motley Fool recommends Coca-Cola, Ford, PepsiCo, and SodaStream. The Motley Fool owns shares of Coca-Cola, Ford, PepsiCo, and SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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