Tomahawk, WI 10/18/2013 (BasicsMedia) – PepsiCo, Inc. (NYSE:PEP) with a market cap of around $126.64 billion, still ranks second to Coca Cola in the soft drink industry. The latter is well known all over the globe, while the former is nowhere near it in terms of popularity. However, one needs to understand that two of PEP’s snacks, Cheetos and Doritos, are dominant in the retail market. Coca Cola is the leading beverage maker globally, and PEP is yet to reach these heights in terms of recognition. Since PEP is mainly a soft drink maker, it needs to focus more on this area to overhaul Coca Cola.

PepsiCo Struggles With Declining Soda Sales

Consumption of soda is something that PEP and Coca Cola are struggling to resolve. The latter is focusing on emerging markets in the hope that the growing middle class will help its sales where soda consumption is concerned. PepsiCo Inc must follow Coca Cola’s lead if it expects to see an increase or improvement in its soda or soft drink division. The company reported a 4% loss in the volume of its soft drink unit across North America. However, PEP attributes this drop in sales to the fact that it increased or maintained the soft drinks prices at the same level.

PEP’s Revenue from Uncarbonated Drinks Continue Declining

Uncarbonated drinks never contributed much to PEP’s revenues. The company reported a 5% rise in uncarbonated drinks, which I do not think is good enough to make significant contributions to its revenues. The company only reported single digit contribution made by these drinks in its overall revenues. Its results have to be measured against those of the biggest player in this industry, Coca Cola, which reported a 2% growth in overall volume, especially in North America, where PEP never had much joy. PEP must increase its presence in North America.

These latest quarterly results have to be put into perspective, especially where PEP is concerned. The company’s top executives have said that the beverage industry is very good for PEP in terms of cash-generation. No matter how much it struggles to overtake or make a dent in the market, which dominated by Coca Cola globally, I think PEP would be a loss-making venture if not for the soft drinks or beverage industry. It is worth mentioning that PEP confirms that it is on its way towards achieving the financial goals it had for 2013 at the start of this fiscal year.

PEP Almost Matches Analysts’ Expectations

The difference between what PEP posted in its financial results and analysts’ expectations is not too wide. While analysts were expecting PEP’s revenue to settle at $16.97 billion, the company’s reports indicate that it only managed to raise $16.91 billion. However, this report never had a negative impact on PEP’s stock. The company benefited from this announcement since its stock has risen up since it released its quarterly results. The company’s net income was $1.91 billion, which is a slight gain from the $1.90 billion it announced for the same quarter a year earlier.

PEP’s overall sales in drinks division rose by 1%, compared to the 3% increase it its food business. It can do much better than it has thus far, by taking advantage of its global reach, and brand recognition.

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