Can Pepsi pull away from Coke?
While the former looks to expand its snack and soda exposure, the latter struggles to stabilize management.
One has to wonder after the two pieces of news that came out yesterday about the companies. In the morning we learned that one of the fastest growing restaurant chains. Buffalo Wild Wings (BWLD), is ripping out Coke and putting in Pepsi along with working directly with PepsiCo subsidiary, Frito-Lay, to develop custom-designed product.
Also, Coca-Cola announced a management shuffle that included the departure of Steve Cahillane, head of the Americas division for the company, who is leaving just eleven months after he took the job. Coke is an insular place these days, so we can't be sure, but there had been a lot of talk that Cahillane might take over the reins when Muhtar Kent retires.
Cahillane was helping to pave the way for the refranchising of bottlers, one of those financial engineering things that Coca-Cola is doing that doesn't attack at all the core issue -- namely, people are drinking less and less soda, both regular and diet. Both are dying categories, the first because of obesity and diabetes and the second because, well, who knows what, but if you go to the doctor, s/he will tell you not to drink diet sodas. Doctors want you to drink water, and Coca-Cola has a water business. But it is hardly as lucrative as soda.
Now, PepsiCo faces the same challenges and its deal with Buffalo Wild Wings shows how it can leverage that snack-soda duality that Nelson Peltz has questioned.
I am a huge believer in Indra Nooyi, have been for years, and she believes both companies should be under the same roof. Smart CEO.
I'm with her. She is one of my Bankable 21, the 21 CEOs I salute in Get Rich Carefully that comes out at the end of the month.
Yesterday we saw the intelligence of keeping the two companies together. Maybe soda comes back one day. But in the meantime, like all no-growth to declining categories, it's a market share game.
Consider this a moment: PepsiCo is flexing its muscles. Coca-Cola? It's gone flat.
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Anyone seen these Coke "drink mix" machines? They are in 5 Guys Burgers and a few other restaurants we frequent. You can pick from just about every soda Coke makes and then have flavorings added to it, all from the same self-service machine. Me personally - I like the cherry vanilla Coke Zero. Haven't seen any of these machines from Pepsi.
Well let’s see, when an independent Cocoa-Cola tried to buy Gatorade in an expansion effort over a decade ago Warren shot it down, fired everybody, and put in a puppet management team. That crack staff has lost control of the message, the market and the manufacturing. But the margins are good, the management is cheap and under control (no real competition to rock any balance sheets) and the message- well the message is don’t cross Warren. Your place in Berkshire is to make margins not markets, just milk the cash cow ‘till she drops, we’ll take care of the dead meat in Omaha.
I ride a motorcycle, a Honda Rebel.
I just signed a contract for Boeing to build the 777X in my back yard. No more mowing the lawn!
And if you want to tell someone you just don't care ...give them cramers new book for christmas ....
And let's not forget about **** Cheney sticking to his guns by still calling Nelson Mandela a terrorist. Cheney was last heard ranting and raving: "LONG LIVE APARTHEID", "KILL ALL THEM DARKIES" and "KILL ALL THOSE GAYS AND LESBIANS..... ummm..... except for my daughter".
Forgive all them Repukelican lunatics Lord, for they all suffer from "Affuenza".
DIE REPUKELICANS, DIE!
P.S. PEPSI RULES LIKE DEMOCRATS! COKE SUCKS LIKE REPUBLICANS!
I'm here with rest of the sheeple...Not much happening today...
BTW...We or Miss Lilly is a Coca-Cola addict...So I will not enter discussion.
Although we do have 7 full bottles of the old, old recipe; And one empty, plus the carton..
That was before the decided to bring it back, about 30 years ago or thereabouts ?
I will drink both (P/C) or either with whiskey, don't make much difference after 4-5 cocktails.
I guess if you compare us to the World's population...We might be the 1-2%'ers..
At least most on this blog...
Maybe we don't realize it, but should be thankful for it....
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