Large companies such as beverage giant Coca-Cola (NYSE:KO) , its European bottler Coca-Cola Enterprises (NYSE:CCE) , and snacks/beverage conglomerate PepsiCo (NYSE:PEP) typically understand that resting on their laurels can spell death. From time to time companies such as these introduce new products to renew the interest of consumers and cater to new trends. Let's take a look at six of them and see what Foolish insights can be had into the future of the beverage industry.
The healthy lifestyles movement has certainly taken its toll on carbonated soda demand. Coca-Cola saw its global carbonated soda volume expand a mere 1% in 2013. The company recognizes the urgency of innovating new products perceived as healthier in the soda segment. As a result Coca-Cola recently introduced the Diet Coke Frost. The company press release highlights its low 30 calorie count and low carbs amounting to only 12 grams. Initially the product will be distributed at 7-Elevens in the country with a wider distribution coming at the "end of May". While this may hardly move the needle on Coca-Cola's global carbonated soda business it certainly represents a move in the right direction to rejuvenate consumer interest in its increasingly stigmatized soda segment.
Coca-Cola's European bottler Coca-Cola Enterprises fared slightly worse in its carbonated soda business with a 0.5% growth in sparkling beverages in 2013 . According to Beverage Daily, Coca-Cola Enterprises wants to help counteract this by introducing a new line of fruit based carbonated sodas known as Finley to the French market. Research in France told Coca-Cola Enterprises that only 10% of the nation's adults consume carbonated sodas. The French show preference for warm drinks such as coffee and tea. The article said this represents an effort for Coca-Cola Enterprises to diversify its product line and serve a need for lower calories.
PepsiCo gets healthier
Unlike Coca-Cola, PepsiCo sells both beverages and snacks which gives it greater product diversity and represents a strength. When factoring out extraordinary items such as currency translations, acquisitions, and divestitures, PepsiCo's snack volume increased 3% versus just 1% for beverages in 2013. Playing on its strength in snacks and recognizing the consumer's appetite for all things perceived as healthy it launched two new flavors within the "Lay's Kettle Cooked 40 Percent Less Fat" line: sea salt & vinegar and jalapeno cheddar. Moreover, PepsiCo introduced a new low calorie Smartfood Delight popcorn that also comes in sea salt and white cheddar flavorings.
New products are extremely important to long term investors as they will likely make or break these companies in the years to come. With that said, geographic expansion and product innovation is a must for these large and mature companies facing shifting consumer tastes. Feel free to add these companies to your Motley Fool Watch List to track their progress. As always Foolish investors should do their own research before making any investment decisions.
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William Bias owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of Coca-Cola and PepsiCo. 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.