Monster, PepsiCo, Starbucks, and WhiteWave: 4 Interesting Stories to Watch

Interested in investing in the beverage industry? Exploring these recent stories may help you decide.

Jan 31, 2014 at 10:45AM

This week's beverage industry headlines revealed some interesting product and expansion news for energy drink company Monster Beverage (NASDAQ:MNST), snack and beverage giant PepsiCo (NYSE:PEP), tea and coffee restaurant chain Starbucks (NASDAQ:SBUX), and "plant based foods and beverages" company WhiteWave Foods (NYSE:WWAV). Exploring this week's news centering on these companies may help you decide their investment worthiness.

Monster innovations
Monster Beverage plans to introduce new products such as Punch Monster which will replace Monster DUB according to an article in Beverage Daily. Company executives believe it "will appeal to a far broader audience of consumers" than DUB. Monster's line of punch will certainly appeal to the party going weekender who desires to stay up all night long to enjoy the festivities. Moreover, Monster plans to introduce a Viva Mango brand of juice cocktail which comprises 5% real juice under the Monster Peace Tea Brand.

PepsiCo movements
On Jan. 24, PepsiCo announced a $5 billion investment in Mexico giving indication that the company shows no intention of resting on its laurels. This literally means an investment in Mexico via a four pronged approach that involves innovation and brand building, infrastructure, agriculture, and community. PepsiCo wants to expand its brand and product portfolio in the country to meet the changing needs of Mexican customers. It also wants to enhance its research and development capabilities there. In addition, PepsiCo will expand manufacturing capability; enhance logistics, and retailing technologies.The company also wants to strengthen its relationship with the local farming community in an effort to improve agricultural yields and strengthen the company's supply chain. Finally, PepsiCo via the PepsiCo Mexico Foundation will invest in "societal development projects throughout the country".  

In other surprising PepsiCo news, newsletter Food Navigator reported that the company axed the "stevia-sweetened" Gatorade Natural line saying it failed in consumer appeal which should tell you that slapping a "natural" or "organic" label on a product doesn't necessarily translate into sales growth. 

Starbucks expands
Carbonated beverage giants such as Coca-Cola, PepsiCo, and Dr. Pepper Snapple Group should take note of Starbucks' successful experimentation with carbonated soda beverages in various test markets such as Atlanta, Japan, and Singapore according to an article in Beverage Daily. Starbucks CEO Howard Schultz called these products "premium hand-crafted, cold-carbonated beverages" that involve Starbucks' employees carbonating a customer's favorite drink in a soda fountain tradition and creating an entertaining social experience. Moreover, Starbucks plans to eventually expand its premium juice brand Evolution Fresh and Teavana brands both in its restaurants and in the consumer packaged goods category over the long-term. 

WhiteWave on the move
According to newsletter Food Navigator, WhiteWave Foods entered a licensing agreement with Dunkin' Brands to make and sell coffee creamers with the Dunkin' Donut label. The company will offer the product in various container sizes and product variations. WhiteWave and Dunkin' Brands executives agree this deal represents a win-win situation that will boost the sales of WhiteWave and reinforce Dunkin' Brands' leadership in the coffee business. 

Foolish takeaway
Monster, PepsiCo, Starbucks, and WhiteWave show no interest in standing still. Monster resides in the No. 2 spot in the energy drink category and new product introductions show its desire to knock competitor Red Bull out of the No. 1 spot. Look for a larger company such as Coca-Cola, PepsiCo, or Red Bull to buy them out in the future. If not then, Monster will probably expand the wealth of public shareholders at a brisk pace. PepsiCo wants a larger share in the Mexican economy that exhibits a growing middle class. A $5 billion investment represents no small amount of money even for a company like PepsiCo and will surely pay off for the company and its shareholders in the future. Starbucks' entry into carbonated soda and expansion of its premium juice and tea categories will give beverage giants like Coca-Cola a run for their money. WhiteWave's recent expansion into the organic vegetable market , its planned entry into China , and now its partnership with Dunkin' Brands show that this company will not go anywhere anytime soon. Monster, PepsiCo, Starbucks, and WhiteWave deserve a place on your Motley Fool Watchlist.


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William Bias owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola, Monster Beverage, PepsiCo, and Starbucks. The Motley Fool owns shares of Coca-Cola, Monster Beverage, PepsiCo, Starbucks, and WhiteWave Foods. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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