Coca Cola and Pepsi both own powerful global brands, enjoy price inelasticity and wide competitive moats, and will benefit from long term demographic socio-economic growth and operating leverage.

Created by author using publicly available financial and stock price data. Over the last 20 years, Coca Cola's unit case volume increased at a compounded annual growth rate of 2.9%, and has only declined on two occasions: (1) in 2017 due to the deconsolidation of German bottling operations in May and the refranchising of several bottling territories in North America, which required that Coca Cola Bottling Investments eliminate sales of non-company-owned and licensed brands sold by these bottlers from its case volume (as stated in Coca Cola's 2016 10-K filing: "for non-Company-owned and licensed beverage products sold in the refranchised territories for which the Company no longer reports unit case volume, we have eliminated the unit case volume from the applicable base year when calculating volume growth rates on a consolidated basis as well as for the North America and Bottling Investments operating segments"); and. Regarding profitability, Pepsi Company should increase its sales revenues particularly those that continue every year while reducing the expenses to record more net profits like the Both KO and PEP are dividend aristocrats, which are companies that have raised their dividend for at least 25 consecutive years. Theyre leaders in their segment, but how do they compare? Figure 22: Comparison of international revenues. The company possesses around 100-plus beverage products of its own. Next, complete checkout for full access to StartupTalky. To face the challenges and to increase resource sustainability, the PepsiCo Company works with so many community-based organizations. The pricing strategy of Coca-Cola is what they refer to as "meet-the-competition pricing": Coca-Cola product prices are set around the same level as their competitors because Coca-Cola has to be perceived as different but still affordable. Both companies have relatively strong EBITDAs margins due to their "asset light" business strategies in which they license their brands, sell concentrates, and outsource the more asset intensive manufacturing and distribution functions to third party bottlers. Pepsi's international segments have taken less of a hit in 2020 through the early stages of the COVID-19 outbreak than Coca Cola (figure 29, dashed lines) for similar reasons, although Coca Cola has rebounded more strongly is 2021 with the re-opening of economies around the world. For Michael Bray, the co-owner of cocktail and nightlife venues Ding-a-ling and Kind Regards in NYC, Cokes accessibility and iconic Americana make it available to any perspective or persuasion. Plus, he adds that Coke tastes rich and delicious. But when it comes to Pepsis legacy, Bray cant help give the brand credit. Some specific assets that were obtained by the companies as part of the acquisition may have depreciated, and amortized. Higher free cash flows mean greater flexibility for the business to pursue new growth opportunities and pay higher dividends. StartupTalky is top startup media platform for latest startup news, ideas, industry research and reports, inspiring startup stories. Note: this Is this happening to you frequently? The emphasis was on safeguardingsustenance. PepsiCo, along with beverages, has a much more diversified business with almost half of its revenues coming from snacks and food products. For others, Pepsis intensity is what distinguishes it from Coke, while some point to Cokes higher sodium and more aggressive fizz. Later, in the U.S., a song titled Rum and Coca-Cola may have helped solidify its role as the perfect complement to rum. Coca Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) are companies that need no introduction as most of us are consumers of their products. I have no business relationship with any company whose stock is mentioned in this article. They have various sizes of bottles offered at various rates. Statista assumes no liability for the information given being However, on an overall basis, both companies have been experiencing negative sales growth. Last year carbonated-drinks sales totalled $77bn in America, and over $312bn globally. The campaign resulted in around 7% growth in the consumption of coke by young adults. ago TLDR version: Its a distribution issue. That advert trivialized the Black Lives Matter movement. Companies must use their highest position to achieve the common good of society. Financial Statement Analysis: Pepsi V Coca Cola Essay Samples. In comparison, Coca Cola, which is more exposed to out of home restaurant consumption, took a bigger hit in 2020 when the lockdowns caused restaurants across the US and Canada to be shut for a period of time (figures 27 and 28). This puts Pepsi ahead of Coca-Cola. WebFind many great new & used options and get the best deals for Hot Wheels Dairy Delivery, Pepsi Cola , The Clown ,Its A Custom at the best online prices at eBay! Sorry, something went wrong. Pepsi's revenues is almost twice that of Coca Cola (figure 10, orange and blue lines). They also sell 9 billion products per day. Check out our Best Dividend Stocks page by going Premium for free. Despite Pembertons role as the brainchild, the brands meteoric rise has been largely attributed to Frank M. Robinson, Pembertons bookkeeper, who is credited as the genius behind Coca-Colas name and iconic logo that still graces the companys branding today. Then after 17 years he left coke and signed a contract with pepsi. Therefore, the income statement of Coca-Cola is better than that of Pepsi. Suppliers Since the balance sheet tells a lot concerning the fundamentals of the companies regarding debts, and collection from the customers both beverage firms Pepsi and Coca-Cola need to improve their cash flows. KO may be able to produce more net income, but PEP has been generating more top-line revenue than KO for decades. PepsiCos revenue base has been almost double that of Coca-Cola. Pepsi's North American Beverage operating margins (orange dashed line) are comparatively thinner (~10%) and have been declining over the past 5 years. Buy now, save instantly, get the job done on time! Both companies have extensive global distribution. Fixed income news, reports, video and more. 2023, https://www.wowessays.com/free-samples/financial-statement-analysis-pepsi-v-coca-cola-essay-samples/. Frito Lay North America has generated strong and growing operating income (figures 20 and 21, green lines) due to its wide margins and revenue growth, and is an important growth driver for Pepsi. Figure 24: Comparison of international operating income margins, Note: Pepsi began reporting APAC and AMESA as separate segments only after 2020. Pepsi's EBITDA margins have stayed within a narrow 18-20% range. Dr. John Pemberton, an Atlanta-based chemist, developed Coca-Colas original syrup in 1886. Consequently, the coca cola is constantly looking for other means of reducing costs, improving sales revenues, and deliver quality and more diverse products to the clients. Essay, Topic: The pricing strategy of Coca-Cola is what they refer to as "meet-the-competition pricing": Coca-Cola product prices are set around the same level as their competitors because Coca-Cola has to be perceived as different but still affordable. They are selling products in more than 200 countries. According to Coca Cola's 2021 10-K filing, beverages bearing the company's trademarks account for 2.1 billion, or 3.2% of the approximately 63 billion servings of all beverages consumed worldwide each day. There are hundreds of beverage brands offering a variety of drinks to consumers. The Coca-Cola Company. A follower status can have certain benefits, however, and Pepsi occasionally bills itself as a disruptor brand to this day. Strangely, Pepsi doesnt have an equivalent. The Coca-Cola Company 2015 Annual Report. It has about 92,800 employees whereas its direct competitor Pepsi has about 203,000 employees and DPS has only 19,000 staff. PEP has produced consistent net profit margins of around 10%, while KO margins have been in the 15-18% range for the past several years. The two firms had competed for decades, but they mostly fought low-grade battles. When it comes to big flashy advertisements and marketing campaigns, both of them play their parts incredibly well to drive their sales effortlessly. Coca-Cola recorded a net income of 7.1 billion in 2014 and 7.35 billion in 2015. This is priced according to the quantity of the drinks supplied. KO currently ranks #26 on the list of largest companies traded on U.S. stock exchanges, while PEP comes in at #37. That is the corporations should review their assets on the balance sheet and make a decision regarding the assets that are contributing to the generation of revenues. Analysts Disclosure: I/we have a beneficial long position in the shares of KO either through stock ownership, options, or other derivatives. Coca-Cola and PepsiCo remain dominant. sample is kindly provided by a student like you, use it only as a guidance. Its not unusual for products to taste different depending on the country in which they are produced.

According to Forbes List of Most Valuable Brands, it ranked 6th with a brand value of $64.6 Billion in 2020. The forecast for EPS was raised from $6.63 to $6.73 in FY 2022, up 7.5% over FY21. Thats a positive for Coca-Cola. Hero Campus Challenge Season 8 is an opportunity for you to peek into the world of Hero by working on real business challenges. Coca Cola and Pepsi are consumer product powerhouses, but the stock returns of both companies have underperformed the S&P 500 over the last 10, 5, and 3 years (figure 7). In 1974 he injected a dose of fizzy capitalism into the Soviet Union, which allowed Pepsi to become the first Western product to be legally sold behind the iron curtain. You may opt-out by. and submitted before, Note! In 2021, Pepsi had a 21% share of the US liquid refreshment beverage market in retail channels measured by Information Resources Inc., compared to Coca Cola's 19%. However, a tiny lead! We didnt start the fire. He had had enough of the intense marketing battle between Americas fizzy-drinks behemoths. Generate fixed income from corporates that prioritize environmental, social and governance responsibility. Therefore, the income statement of Coca-Cola is better than that of Pepsi. I strive to unearth less obvious, overlooked, or under-appreciated but intriguing and potentially profitable data-driven insights into companies of service to society. $250 billion vs $268 billion. ETFs and funds that prioritize investments based on environmental, social and governance responsibility. Bargain purchase. (4) Movement against sugared beverages and highly salted snack foods. Retrieved 15 June 2016, from http://www.coca-colacompany.com/packages/2015-year-in-review 086 079 7114 [email protected]. But what remains key is the revenue mix of these two companies. Coca-Cola Vs PepsiCo: FAQs. Coca-Cola Vs PepsiCo: Strengths As a result, thats a close race! Great! WebFind many great new & used options and get the best deals for Hot Wheels Dairy Delivery, Pepsi Cola , The Clown ,Its A Custom at the best online prices at eBay! "Financial Statement Analysis: Pepsi V Coca Cola Essay Samples. Order a unique paper from WowEssays right now! The consumer packaged goods industry is the other industry where PepsiCo has its footprints. Though Coca-Cola is expected to narrow its revenue gap with PepsiCo in the medium term, Pepsi is likely to still be bigger in size and more diversified. Free shipping for In 1975 Coca-Cola spent around $25m on advertising and PepsiCo some $18m. As Smithsonian Magazine explains, for some aficionados, Mexican Cokes addition of cane sugar makes it preferable, resulting in a truer, less chemical-y taste; a realer real thing.. One such advertisement campaign is Share a Coke with. This campaign introduced the coke bottles listed with peoples names on them. These courses will help you to get a job or upgrade your skills. Figure 8: per capital consumption of top 10 countries in 2012. As a brand, Coca-Cola had a value of over five times that of Pepsi. The Coca-Cola Company. PepsiCo is over-dependent on soft drinks and packaged foods. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. The net income for Pepsi Company is 6.5 billion and 5.45 billion in 2014 and 2015 respectively. To face the challenges and to increase resource sustainability, the income Statement of Coca-Cola is than... Depreciated, and amortized legacy, Bray cant help give the brand credit income for Pepsi company is 6.5 and. Than ko for decades, but how do they compare introduced the bottles. Any company whose stock is mentioned in this article income news, reports, inspiring stories. Pepsi occasionally bills itself as a guidance have depreciated, and Pepsi bills. Brand, Coca-Cola had a value of over five times that of Coca-Cola is better than that of is. 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