) recently launched two new flavors of its Lay's branded potato
chips, Lay's Kettle Cooked Applewood Smoked BBQ and Lay's Kettle
Cooked Sun-Dried Tomato and Parmesan under its Frito-Lay segment.
The new flavors have 40% less fat than ordinary potato chips. They
will be available all over the nation in 8 oz packages.
With the consumers increasingly becoming health conscious, there is
a huge demand for snacking products that taste good and better for
their health. The two new flavors of Lay's chips are aimed to meet
this need of health conscious consumers.
Earlier this year, the company had launched Pepsi Next, which
contains 60% less sugar to attract the health conscious consumers.
Changing consumer preferences toward healthier drinks, as a result
of increasing health consciousness, have been affecting the
company's carbonated soft drinks volumes.
Product innovation plays a huge role in the company's success. The
company regularly creates new flavors of existing products as well
as maintains a robust pipeline of new products. For example,
in June 2012, Pepsi introduced Baked Three Cheese Queso and Toasted
Southwestern Spices flavored tortilla chips under Tostitos Artisan
The company also utilizes new packaging to shift consumers to
more profitable purchases. The company's 24-ounce can for regular
and diet Dew is generating good customer response.
The company also focuses on premium innovation to drive higher
net price utilization. At the premium end, some recent product
launches include Quaker Real Medleys hot cereals, Stacy's
Gingerbread and Stacy's Cocoa and Lay's Stax potato chips. In 2012,
the company aims to double the contribution of new products to
total revenue in both snacks and beverages globally.
Currently, PepsiCo Inc. carries a Zacks #3 Rank in the near term
(Hold rating). We are encouraged by the company's strong brand
portfolio, its product and geographic diversity and solid cash flow
generation. Moreover, PepsiCo's marketing support investments,
brand building innovation and cost saving efforts will boost growth
in the long term.
However, a challenging consumer spending environment combined
with higher commodity costs are matters of concern. Further, the
company faces strong competition from
The Coca-Cola Company
). In U.S. measured channels, The Coca-Cola Company commands a
larger share of carbonated soft drinks (CSD) consumption. The
Coca-Cola Company also enjoys higher market share in many markets
outside the United States than PepsiCo.
Headquartered in Purchase, New York, PepsiCo, Inc. is the
leading global food and beverage company marketing hundreds of
brands in more than 200 countries. Its principal businesses
include: Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports
drinks, Tropicana juices and Quaker foods.
PepsiCo's overall product portfolio includes 22 brands including
Pepsi, Mountain Dew, Gatorade, Tropicana, Lay's, Doritos, Cheetos
and Quaker, all of which generate more than $1 billion each in
annual retail sales.
COCA COLA CO (KO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
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