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coca-cola is recovering better than pepsico in beverages, says analyst
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pepsico has beaten analyst expectations for first quarter profits but morning star analyst philip gorham believes that in beverages coca-cola is recovering better from the recession. quarterly net income at pepsico stood at $1.14bn - slightly above analyst estimates but down from the $1.43bn reported last year because of interest expenses linked to its bottler acquisitions. the maker of gatorade and tropicana said like-for-like beverage volumes rose 3.5 per cent while snack volumes were up 3 per cent. but these figures were not enough to persuade the markets that pepsico deserves a higher stock valuation. explaining why, morning star analyst philip gorham pointed to the weakness of the beverage business since the recession. “the beverage business has been particularly weak, and we think pepsi’s sluggish recovery from the downturn in beverages, particularly in comparison with coke, is a key reason for its low relative valuation.” in beverages, pepsico is not only struggling to increase sales - it is also facing higher input costs as pet and sweetener prices rise. during its earnings call, pepsico cfo hugh johnston said: “in the first quarter, inflation impacted our beverage operations more dramatically than our snacks. we covered some but not all of the beverage commodity cost inflation with pricing.” over the year pepsico is expecting costs to go up across its business by $1.4bn - $1.6bn on a base of $18bn of commodity based inputs. but not everything is pointing the wrong way for pepsico. the company is reaping the rewards from its focus on emerging markets. pepsico chairman and ceo indra nooyi emphasized the point in a statement announcing the first quarter results. “growth in emerging markets was strong, driving attractive gains in eastern europe, asia and the middle east.” and pepsico is working to develop some of its key beverage brands. it has all but completed a rebranding of sports drink brand gatorade and gorham said major changes are expected to the tropicana juice brand later in the year.
Source :foodanddrinkeurope.com
Date :
29
April
2011
Category :
restaurants and Food industrie
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the australian competition and consumer commission (accc) has announced it will not oppose the proposed acquisition of p&n beverages australia by japanese brewery group asahi after competition concerns were resolved by asahi. on 9 march 2011, the accc opposed an earlier acquisition proposal, saying it would ‘remove p&n as a vigorous and effective competitor in the markets for the supply of carbonated soft drinks (csds) and cordial’.
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the coca-cola company and the nature conservancy announced today the release of a water footprint report in conjunction with world water week in stockholm, sweden. the report, entitled “product water footprint assessments: practical application in corporate water stewardship,” examines three pilot studies that were conducted on coca-cola products and ingredients.a product water footprint is the total volume of freshwater consumed, directly and indirectly, to produce a product.
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beverage companies will need to move beyond their traditional categories in terms of future mergers with increasingly health focused consumers and an unprecedented level of retail pricing pressure creating serious challenges for the sector, says a rabobank report. acquiring competitors within their core segment is becoming increasingly complicated for leading beverage manufacturers due to the tighter competition regulation and existing level of consolidation within the industry.
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the coca-cola company has seen volume growth rise by a robust 4 per cent in the second quarter as beverage demand remained strong. the result was led by the key emerging markets of india and china, where volume growth came in at 33 per cent and 14 per cent, respectively. still beverages - which include juices, sports drinks, teas and water brands - outperformed sparkling beverages internationally, while the flagship coca-cola brand saw volumes climb by 3 per cent.
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taiwan has said it would intensify checks on imported products into the country after a batch of concentrate for a coca-cola product was found to contain a preservative banned in the country. two weeks ago, a batch of concentrate for coke zero, which was being exported from china to taiwan, was banned in taiwan for containing methyl para-hydroxybenzoate. consumption of methyl para-hydroxybenzoate, an antiseptic chemical, is said to lead to stomach upsets and raise female hormone levels.
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cas, the leading provider of customer management and mobility solutions to the consumer products industry, has launched the latest version of their customer management and mobility solution. cas 8 has been designed with input from many of the company’s clients, who include campbells, the coca cola company, nestle and abinbev. cas australia, based in north strathfield, sydney, are also working with many leading local consumer product companies including arnotts, lion nathan, blackmores, pernod ricard and coca cola amatil.
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