PepsiCo's (PEP) snacks division has been performing well in recent years, registering healthy rates of organic sales growth in both developed and emerging economies. The segment is also the most profitable for Pepsi with the company maintaining a healthy operating profit margin of around 20% for the last five years. But PepsiCo's increasing focus on the snacks division has meant a long-standing decline of its beverage segment. The company's declining performance in juice labels in recent years is symptomatic of this trend.

Tropicana has historically been the best-selling range of packaged juices in North America, but PepsiCo's botched attempt (read on Bloomberg) at reworking the brand in 2009 literally gave away a major share of the North American market to key competitor Coca-Cola (KO), which operates in the segment through the Minute Maid range of juices.

Although Tropicana continues to lead the market in the U.S. today, its footing has never been quite as solid as it was before 2009. Minute Maid continues to chip away at the market and has been introducing variants priced either slightly above and slightly below Tropicana. Minute Maid's Simply Orange, for example, has been pushed into the premium segment and is priced at around 40 cents more than Tropicana's orange juice. Minute Maid's value brand, meanwhile, has been priced at a dollar less.

Tropicana and other juice labels contributed 12% to PepsiCo's revenues in 2011. According to our estimates, the segment contributes around 8% of the total value of its stock price. The company can ill-afford to lose any significant share, especially in the North American region, which remains PepsiCo's biggest market.

Do investors have any reason to keep their faith with PepsiCo as far as North American juice sales are concerned?

Well, the company certainly can't be blamed for not trying in the U.S. Steps taken by PepsiCo in 2011 include an attempt at diluting Tropicana juice concentrates in an effort to boost margins. The company also launched Trop50, a line of juices flavored with Stevia, a natural low-calorie sweetener for the health conscious. In another major step towards the end of 2012, the company launched a range of non-sugary vegetable juices to win back consumers who were turning away from artificially sweetened fruit mixes. Whether the company is able to fight off Minute Maid's onslaught and increase its share in the North American market remains to be seen. But these developments definitely mean that PepsiCo is throwing its weight behind the brand.

We have a price estimate of $79 for PepsiCo, which is about 15% higher than the current market price.