The Latest News in the Beverage Industry: Coca-Cola, SodaStream, and Dr Pepper Snapple

Interested in investing in beverage companies Coca-Cola (NYSE: KO  ) , SodaStream (NASDAQ: SODA  ) , and Dr Pepper Snapple Group (NYSE: DPS  ) ? Exploring this week's news in the beverage industry may help you decide.

Partnerships and innovation
Coca-Cola's Honest Tea subsidiary recently took its zero-calories Unsweet Lemon Tea national. Feeling good about the success of its Just Green Tea drink, Honest Tea thinks it can capitalize on the robust tea market. On the innovation front, Drinks Business Review nominated Coca-Cola for the 2013 DBR Drink Innovation Award. Last month in Japan, Coca-Cola introduced a Canada Dry Hot Ginger Ale drink in a can designed to maintain the carbonation when the drink gets heated from a "chemical concoction" within the container.  

SodaStream increased the convenience of making soda at home in the United States by introducing SodaStream caps. You essentially take the pre-measured one-use capsule and pour it in the bottle to make a drink. This will certainly add to its appeal for the environmentally conscious consumer. Moreover, it may appeal to the convenience-oriented consumer who doesn't want to measure the amount of syrup to make a drink.  

In an effort to expand their presence as well as combat waning sales in the perceived "unhealthy drinks" arena, beverage companies -- via partnerships or their own research team -- are bringing new products to market to entice consumers. Dr Pepper Snapple Group intends on using excess distribution capacity to expand the range of products it sells. Last month, the company partnered with Sunny Delight Beverages to sell the Sparkling Fruit2O flavored water. More recently, Dr Pepper Snapple teamed up with Bai Brands, makers of Bai 5-Calorie Antioxidant Infusions to bring its natural beverages to major markets.  

Packaging and advertising
According to a Beverage World article, Dr Pepper Snapple has engaged brand agency CBX to revamp its Sunkist logo and bring back its iconic sun ball graphic. D. Pepper Snapple felt that its current packaging lacked differentiation and lost connection with its "California beach story." The company wants the brand revitalized for the younger demographic. With that said, it can use all the help it can get, considering that its carbonated soda volume fell flat in its most recent quarter. 

Coca-Cola invested in its first dairy cooperative, Fair Life, which owns Core Power, a high-protein shake. With the resources of Coca-Cola, Core Power executives want to sell the public on the "sex appeal of vitality" that comes from drinking the protein shake, according to Beverage Daily. Core Power executives utilized Coca-Cola's distributions system to take its brand national. 

Trends
In a recent article, Beverage World cited statistics that offer reassurance to the long-term shareholders of eco-friendly companies such as SodaStream. According to the article, over 75% of the 4,000 people polled increasingly consider environmental factors such as recyclability and environmental friendliness of packaging in their purchasing decisions. In an interesting contrast, another Beverage World article talks about the falling rate of recycling during the 10-year period from 2000 to 2010. The article cited a "national wasting rate for 2010 at 63 percent" versus 59% in 2000. The article suggests that if recycling became more convenient via the increased availability of recycling bins, then the rate of recycling might follow. If more consumers can incorporate an eco-friendly mentality, then companies like SodaStream may thrive even more.

Foolish takeaway
These headlines point to the understanding on the part of the beverage industry that consumers increasingly want healthier drinks and eco-friendly packaging. As a result, companies are stepping up with new products either internally generated or through partnerships and acquisitions.

With that said, if you're looking for some long-term investing ideas, you're invited to check out The Motley Fool's special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2741604, ~/Articles/ArticleHandler.aspx, 8/22/2014 5:03:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement