The Frito-Lay division of
) recently introduced a new flavor of potato chips; under its
popular brand Ruffles. The new product brings the flavor of the
popular snack beer-battered onion rings to Ruffles MAX
beer-battered onion rings flavored potato chips.
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With changing consumer preferences, there is a huge demand for
new snacking products that tickle the taste buds. The
introduction of beer-battered onion rings flavored potato chips
comes at a crucial time, with spring events such as St. Patty's
Day just around the corner and sporting events and spring break
trips in full swing.
Product innovation plays a huge role in the company's success.
PepsiCo regularly creates new flavors of existing products as
well as maintains a robust pipeline of new products. The
company had recently introduced a new flavor of tortilla chips,
under its popular brand Tostitos Artisan Recipes. The Grilled Red
Pepper and Tomato Salsa flavored tortilla chips are inspired by
the rich Mexican mole sauce.
Overall, we are encouraged by the company's strong brand
portfolio, its product and geographic diversity and solid cash
flow generation. Moreover, PepsiCo reported impressive
fourth-quarter results beating the Zacks Consensus Estimate for
both revenue and earnings. In addition, the company provided an
impressive outlook for 2013, which was in line with long-term
targets, and also increased its dividend rate. On the other hand,
The Coca-Cola Company
), reported mixed fourth quarter results, beating the earnings
estimate but missing out on sales.
However, we prefer to remain on the sidelines as a challenging
consumer spending environment and continued sluggishness in the
North American beverage business concerns us.
PepsiCo carries a Zacks Rank #3 (Hold).
Other companies in the sector, which are better positioned at
current levels include
Coca-Cola Hellenic Bottling Company S.A.
) carrying a Zacks Rank #1 (Strong Buy) and
Coca-Cola Enterprises Inc.
) carrying a Zacks Rank #2 (Buy).