Friday, February 8, 2008
Pepsi...drinks or snacks?
PepsiCo is known as one of the largest beverage manufacturers globally. It was interesting to hear that this company thought that they would end up with lower profits. According to the Dow Jones, “Pepsi's shares had fallen nearly 5% since Jan. 28, the day before Pepsi Bottling Group Inc.” There was some worry that they would not recover from this downfall.
However, of course they did. It is often forgotten that many of their products include snack foods, which internationally have a large share of the market growth. Their snacks such as Doritos and Quaker rice cakes are part of their broader international footprint. Many of Pepsi’s bottlers do not think about the food line, and just consider their beverages, which have main locations focused in the U.S, Canada, Greece, Mexico, Russia, Spain and Turkey. "The product and geographic diversification benefited PepsiCo significantly," said Todd, Portfolio Manager at Greenwood Capital Associates, which holds PepsiCo shares.
“International earnings rose 12% as revenue grew 26%, including seven percentage points from the weak dollar. Volume growth was led by the Asia Pacific region, which posted a 21% jump.”
Clearly PepsiCo has been doing well internationally, I would like to see how their ad campaigns are different compared to ours here in the U.S. Also, it would be interesting to find out why the snack products go over so well internationally while we are more focused on the beverage. Pepsi appears to be an “American” drink that you would get at a baseball game while eating a hot dog. Maybe this is why the idea of a nice cold refreshing Pepsi is not so popular overseas. They would rather have snack foods that do not have any underlying “All American” meaning behind them.
Pepsi had also recently had a competition to design your own can, this might be a way of trying to reach out to other markets. By doing this, it gets people interested in what new ideas can be brought to Pepsi and will then have Pepsi on the mind, and possibly look for the new can while browsing the beverage aisle.