PepsiCo Launches Two New Flavors to Revitalize Cola Sales

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PepsiCo, Inc. PEP has added two new flavors - Citrus cola and Black Currant cola - to the Cola portfolio (1893 from the Makers of Pepsi-Cola).

"1893 from the Makers of Pepsi-Cola", or more commonly known as 1893, is an all-natural, fair-trade, sugar-sweetened cola produced by PepsiCo that was launched in 2016. 1893 is a blend of kola nut extract, real sugar and sparkling water, and is inspired by the original recipes created in the year 1893 by PepsiCo founder Caleb Bradham.

PepsiCo, in an attempt to revitalize cola sales which is suffering due to high calorie content, is testing cola product variations using evolutionary natural sweeteners in various markets.

Growing health and wellness consciousness - consumers are particularly vigilant about the use of artificial sweeteners, high sugar content and related obesity concerns - is hurting carbonated soft drinks ("CSD") category growth.

Among CSDs, the cola segment particularly has come under the most fire as consumers are opting for alternative beverage offerings. Further, the diet colas are under pressure due to increasing consumer concern regarding the use of artificial sweeteners. Also, potential new taxes on sugar-sweetened beverages and growing regulatory pressures are affecting CSD sales.

Notably, the company regularly creates new flavors of existing products along with maintaining a robust pipeline of new products. PepsiCo has generated $5 billion in annual sales from new products since 2013, as innovation continues to support top-line growth.

Stock Price Movement

Shares of PepsiCo gained around 4.9% year to date, compared with a 2.9% growth of the Zacks categorized Beverages-Soft Drinks industry.

The company's new product lineup, aggressive marketing, productivity improvement and cost-saving initiatives should boost profits and consequently the stock's performance in the upcoming quarters as well.

Zacks Rank & Stocks to Consider

PepsiCo currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in this industry include Coca-Cola Amatil Limited CCLAY , Embotelladora Andina S.A. AKO.B and Primo Water Corporation PRMW , all carrying a Zacks Rank #2 (Buy). You can see  the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Full-year 2017 earnings are expected to increase 7.3% for Coca-Cola Amatil, 24.1% for Embotelladora and 109.5% for Primo Water.

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Pepsico, Inc. (PEP): Free Stock Analysis Report

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Primo Water Corporation (PRMW): Free Stock Analysis Report

Embotelladora Andina S.A. (AKO.B): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: PEP , CCLAY , PRMW , AKO.B

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