Coca-Cola, PepsiCo, and Starbucks: 5 Stories To Watch

New products may or may not necessarily add growth to the top and bottom line.

Apr 12, 2014 at 10:00AM

Beverage, snack, and restaurant industry trade headlines revealed some interesting happenings for snack/beverage giant PepsiCo (NYSE:PEP), beverage giant Coca-Cola (NYSE:KO), and coffee, tea, and sandwich shop chain Starbucks (NASDAQ:SBUX). Reading these stories gives can give you an an interesting perspective on which companies are innovating, making progress in the healthy lifestyles movement, and reworking its product lines.

New Cheetos


Source: Flickr-stockdissector

Innovation is key to keeping a company's product portfolio from turning stale and renewing consumer interest to keep them coming through the doors. Increasing customers boosts the potential for revenue and free cash flow growth which serve as catalysts for returns in the form of capital appreciation and dividends. PepsiCo understands this fact and innovates often. Moreover, PepsiCo demonstrates its ability to understand consumption patterns based on "demand occasion" such as pairing its food and beverage products in new and interesting ways.

With that said, PepsiCo recently introduced a new brand of snack called the Cheetos Flamin' Hot/Doritos Dinamita Chile Mix uniting the flavors and texture of both product lines according to its press release.  This adds to PepsiCo's already large portfolio of snacks.

PepsiCo jumps on the celebrity bandwagon

Jumping on the celebrity endorsed flavoring bandwagon in Lebron James fashion, on April 2; PepsiCo introduced the new sour grape flavored AMP Energy Drink: Dale Jr. Sour for a limited time according to the press release. The limited edition can features a picture of Dale Earnhardt Jr. and his race car serving as a draw for collectors.  The Dale Earnhardt Jr. campaign serves as a wise move on PepsiCo's part as consumers increasingly gravitate toward energy drinks. Beverage-Digest reported a 5% increase in U.S energy drink volume in 2013. 

Coca-Cola Life won't provide growth


Source: Flickr-stockdissector

Coca-Cola, on the other hand, may not fare as well with its new innovation Coca-Cola Life. Industry newsletter Beverage Daily reported that experts believe that Coca-Cola Life, which contains natural sweeteners, will merely cannibalize its other drinks such as Diet Coke and Coke Zero. Challenges in advertising and price may potentially serve as the culprits according to the newsletter.  Coca-Cola needs to up its efforts to address challenges in the carbonated soda arena. In 2013 its global carbonated beverage volume only increased 1%.  Newsletter Beverage-Digest reported a decline in U.S. volume for Diet Coke and Coke Zero of 6.8% and 0.1% respectively last year. 

Starbucks brings back cake slices

The Associated Press reports that Starbucks will reintroduce cake slices due to customer demand or rather the lack of demand for its replacement. Half of Starbucks stores saw complete removal of cake slices much to the dismay of customers. Starbucks had been phasing out cake slices in favor of newer pastry items such as miniature loaves, croissant squares, and rectangular sweet loaves. However, these new pastries haven't sold as well as the cake slices. One barista speculated that smaller portions and a higher price serve as culprits for the bad reception.  

Starbucks introduces a new coffee flavor


Source: Starbucks News

In other Starbucks news, the company recently introduced the New Single-Origin Colombia Narino coffee. According to the company press release the coffee bean comes from the Narino region "in southeast Colombia on the border with Ecuador known as Narino." This particular brand provides an interesting texture and taste such as a "juicy acidity, herbal notes and a walnut-like taste". 

Innovation is no guarantee
PepsiCo strength will continue to be derived from its snack division for the foreseeable future as it continues to introduce varieties in that segment. It seems that Coca-Cola understands the need for innovation even though some of the newer products will merely replace the less fashionable ones in the future. Still Coca-Cola needs to step up its innovation machine to bring about incremental growth. Look for Starbuck to continue to innovate bearing in mind it makes mistakes as well.

The upside potential of groundbreaking innovation
With that said, the one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.


William Bias owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola, PepsiCo, and Starbucks. The Motley Fool owns shares of Coca-Cola, PepsiCo, and Starbucks and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers