Shares of PepsiCo Inc. (PEP - Free Report) hit a 52-week high of $118.12 on May 30. The stock pulled back to end the trading session at $118.01, gaining 0.09% on the day.
The $168.43-billion beverage giant witnessed its shares rising roughly 16.2% in the last one year, outperforming the Zacks categorized Beverages-Soft Drinks industry’s growth of 5.8%.
What’s Driving the Stock?
Cola companies have been facing challenges amid the shift in consumers’ preferences. Given this backdrop, PepsiCo is working hard in transforming itself in order to adapt to the changing customer needs of healthier lifestyles.
Per media reports, PepsiCo is in talks to buy All Market Inc, the owner of coconut water brand, Vita Coco, in a bid to diversify its offerings amid soft sales. According to Reuters, PepsiCo has offered less than the $1 billion for the deal. However, neither the PepsiCo spokesperson nor representatives of Vita Coco commented on the development.
As per data tracker Euromonitor International, Vita Coco is the global leader in coconut water, with 26% market share worth $2.5 billion. Founded in 2004, Vita Coco now spans across 30 countries.
Now, good-for-you products as well as bottled water are gradually gaining traction amid the shift in consumers’ preferences. Coconut water has become a prime alternative to coolers across North America and Europe.
PepsiCo is gradually reshuffling its portfolio toward healthier “Everyday Nutrition Products.” These products contain nutrients such as grains, fruits, vegetables, or protein, and the portfolio falls under a broader category of “Guilt Free Products”. The company now generates 45% of its revenues from this category, which also comprises beverages with less sugar and sodium content.
Like PepsiCo, other rival companies are also opting for alternatives to counter weak sales. PepsiCo’s competitor, Dr Pepper Snapple Group Inc. acquired antioxidant beverages maker Bai Brands LLC for $1.7 billion in January.
The Coca-Cola Co. (KO - Free Report) is also making significant efforts to invest in newer revenue platforms to boost long-term sales and profits. On Mar 28, the beverage giant and its largest Latin American bottler Coca-Cola Femsa SAB (KOF - Free Report) finally closed the proposed acquisition of AdeS soy-based beverage business from consumer products giant Unilever Plc (UL - Free Report) .
The AdeS takeover will boost Coca-Cola’s beverage portfolio in Latin America enabling it to increase the number of nutritious and delicious products offered to its consumers.
We believe, PepsiCo as well as other beverage companies’ efforts to offer more diversified products to reap benefits from a shifting consumer preference toward good-for-you and health and wellness products will bode well in the years to come.
Zacks Rank
PepsiCo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Shares of PepsiCo Inc. (PEP - Free Report) hit a 52-week high of $118.12 on May 30. The stock pulled back to end the trading session at $118.01, gaining 0.09% on the day.
The $168.43-billion beverage giant witnessed its shares rising roughly 16.2% in the last one year, outperforming the Zacks categorized Beverages-Soft Drinks industry’s growth of 5.8%.
What’s Driving the Stock?
Cola companies have been facing challenges amid the shift in consumers’ preferences. Given this backdrop, PepsiCo is working hard in transforming itself in order to adapt to the changing customer needs of healthier lifestyles.
Per media reports, PepsiCo is in talks to buy All Market Inc, the owner of coconut water brand, Vita Coco, in a bid to diversify its offerings amid soft sales. According to Reuters, PepsiCo has offered less than the $1 billion for the deal. However, neither the PepsiCo spokesperson nor representatives of Vita Coco commented on the development.
As per data tracker Euromonitor International, Vita Coco is the global leader in coconut water, with 26% market share worth $2.5 billion. Founded in 2004, Vita Coco now spans across 30 countries.
Now, good-for-you products as well as bottled water are gradually gaining traction amid the shift in consumers’ preferences. Coconut water has become a prime alternative to coolers across North America and Europe.
PepsiCo is gradually reshuffling its portfolio toward healthier “Everyday Nutrition Products.” These products contain nutrients such as grains, fruits, vegetables, or protein, and the portfolio falls under a broader category of “Guilt Free Products”. The company now generates 45% of its revenues from this category, which also comprises beverages with less sugar and sodium content.
Like PepsiCo, other rival companies are also opting for alternatives to counter weak sales. PepsiCo’s competitor, Dr Pepper Snapple Group Inc. acquired antioxidant beverages maker Bai Brands LLC for $1.7 billion in January.
The Coca-Cola Co. (KO - Free Report) is also making significant efforts to invest in newer revenue platforms to boost long-term sales and profits. On Mar 28, the beverage giant and its largest Latin American bottler Coca-Cola Femsa SAB (KOF - Free Report) finally closed the proposed acquisition of AdeS soy-based beverage business from consumer products giant Unilever Plc (UL - Free Report) .
The AdeS takeover will boost Coca-Cola’s beverage portfolio in Latin America enabling it to increase the number of nutritious and delicious products offered to its consumers.
We believe, PepsiCo as well as other beverage companies’ efforts to offer more diversified products to reap benefits from a shifting consumer preference toward good-for-you and health and wellness products will bode well in the years to come.
Zacks Rank
PepsiCo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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