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Coca-Cola Unveils New NFL And College Football Packaging

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As the “Share a Coke” campaign enters its sixth year, Coca-Cola is debuting new labels on 20 oz. bottles of Coke and Coke Zero Sugar featuring logos from nearly 60 college and NFL teams across the country.

Both college and NFL team logos will appear on 20 oz. bottles of Coke and Coke Zero Sugar. NFL logos will also appear on 16 oz. cans of Coke and Coke Zero Sugar.

“We’re excited to give consumers the opportunity to share some team spirit when they ‘Share a Coke’ this football season,” said Oana Vlad, director, Coca-Cola Trademark. “We hope to unite friends, fans and even rivals through the power of ‘Share a Coke.’”

Other labeling includes a variety of football-related nicknames, such as “Squad,” “#1 Fan,” “Pro” and “Legend” on 7.5 oz. mini cans, 12 oz. cans, 8 oz. glass bottles, 1.25-liter, 1.75-liter and 2-liter PET bottles of Coca-Cola and Coke Zero Sugar. Special football-inspired designs will also appear on outer packaging such as the boxes for cans.

In order to activate this regionalized program, several supply chain innovations were necessary, including codes on the custom labels that ensure the correct team logos are shipped to each market.

“Shifting from a national to a hyper-local approach is incredibly complicated and could only happen with the partnership of our bottlers,” Vlad added. “Last summer we made the decision, together as a system, that ‘Share a Coke’ would be our biggest push for 2019. Collectively, we believe in the power of our football assets at the local level.”

Coca-Cola will also be leveraging its longstanding partnership with ESPN College GameDay for its “Share a Coke” campaign. Each week, broadcasts will feature “Share a Coke” moments, shareworthy content and fun experiences. For example, each week 50 fans at GameDay will be chosen to get the VIP treatment, which will include an unlimited supply of ice-cold Coke.

For fans who aren’t on-site at GameDay, there are opportunities to unlock football-themed experiences by scanning the Sip and Scan icon on Coca-Cola packaging and limited-edition fountain cups at participating McDonald’s restaurants.

Customized out-of-home, digital and radio creative will target hometown fans as well, and a national TV commercial will debut at the start of the season.

The 53 participating college teams include: Alabama, Arizona State, Auburn, BYU, Clemson, Colorado State, UConn, Duke, East Carolina, Florida State, Fordham, Georgia, Georgia Tech, Idaho, Idaho State, Illinois, Indiana, Iowa, Kentucky, Miami, Michigan, Minnesota, Mississippi State, Missouri, Monmouth, North Carolina, North Carolina State, Northwestern, Notre Dame, Ohio State, Oklahoma, Ole Miss, Penn, Purdue, Rutgers, South Carolina, Stony Brook, Temple, Tennessee, Texas, UCF, UCLA, UNLV, USC, USF, Vanderbilt, Villanova, Virginia Tech, Washington, Washington State, Weber State, West Point and West Virginia.

The 6 participating professional teams include the Atlanta Falcons, Green Bay Packers, Houston Texans, Kansas City Chiefs, New Orleans Saints and the Philadelphia Eagles.

Team-specific bottles can be found in stores within the team’s market or purchase their favorite team-specific bottles on CokeStore.com while supplies last.

Follow me on Twitter.

I am the founder of BusinessofCollegeSports.com, a nationally-recognized source for news and analysis on the business of college sports. From that site was born a book, Saturday Millionaires: How Winning Football Builds Winning Colleges (Wiley/Turner, 2013). After practicing law for four years, and contributing to Forbes and Comcast Sports Southeast as a sports business analyst, I joined ESPN in 2011 for two years as a sports business reporter. I have a Bachelor of Arts in Politics from Oglethorpe University and a Juris Doctor (J.D.) from University of Florida Levin College of Law. Follow me on Twitter: @SportsBizMiss.

 

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How Important Is Frito-Lay For PepsiCo’s Growth?

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Frito-Lay North America has maintained its position as the fastest growing segment for PepsiCo (NASDAQ: PEP) over recent years. PepsiCo Revenues (shows PepsiCo’s key revenue components) have increased from $62.8 billion in 2016 to $64.7 in 2018, growing at a CAGR of 1.5%. During the same period, FLNA saw its revenues increase from $15.5 billion to $16.3 billion, at a CAGR of 2.5%.

A] Division Overview

1) What is on offer?

  • FLNA makes, markets, distributes, and sells branded snack foods, which include branded dips, Cheetos cheese-flavored snacks, Doritos tortilla chips, Fritos corn chips, Lay’s potato chips, Ruffles potato chips, and Tostitos tortilla chips.
  • In addition, FLNA’s joint venture with Strauss Group makes, markets, distributes, and sells Sabra refrigerated dips and spreads.

2) Who is paying?

  • FLNA’s branded products are sold to independent distributors and retailers.
  • Frito-Lay targets people across demographic sections through its products.
  • The products are positioned as a quick fix solution for hunger and are thus normally included in the category of fast foods.

3) Available Alternatives?

  • The segment faces intense competition from other snacks offerings from Procter & Gamble, Kraft Foods, Kellogg’s Company, and General Mills.

You can view the Trefis interactive dashboard – Frito-Lay North America: PepsiCo’s Primary Growth Driver – and alter the assumptions to arrive at your own estimate for the segment’s and company’s revenues and profitability. In addition, here is more Consumer Staples data.

B] Frito-Lay: Revenue Trend and Revenue Share

  • FLNA has been able to add $0.8 billion to its revenues over the last 2 years, at a CAGR of 2.5%.
  • Revenue growth has been driven by continuous innovation, new products, effective pricing strategies and volume growth.
  • As per the latest PepsiCo Earnings, FLNA revenues increased by 4.5% (y-o-y) in Q2 2019.
  • The segment is expected to grow at a healthy rate to add about $1.3 billion in revenues over the next two years, driven by growth in variety packs and its trademark Doritos.
  • Frito-Lay contributes about a quarter of PepsiCo’s revenues, with its share continuously rising.
  • We expect FLNA to continue to grow at a rate faster than PepsiCo as a whole, taking the segment contribution to 25.6% in 2020, from the current 25.3%.
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Trefis

C] Innovation and Strategies

  • Over the recent years, Frito-Lay has been successfully able to expand its reach to cater to different categories of consumers.
  • Frito-Lay was traditionally a dominant player only in the mid-tier snack segment. It did not have a significant presence in the premium or the bottom end of the snacks market.
  • However, Frito-Lay made its premium products available in high-end stores (such as Citarella) and the deli sections of grocery chains in order to create the right perception of these products.
  • In the bottom end of the segment, Frito-Lay has Cracker Jack as a brand offering high value for money. Similarly, Taqueros was made available in dollar stores and other retail outlets that typically attract value-seeking consumers.
  • Additionally, conscious of a consumer shift toward health snacks, the segment has come up with offerings such as Stacy’s Pita Chips and Sabra, which offers packaged Mediterranean dips such as hummus.

D] Most Profitable Segment

  • Frito-Lay is the most profitable division of PepsiCo, with its operating profit margin being almost 2x PepsiCo’s total operating margin.
  • We expect the segment to improve its margins from the current level of 30.6% to 31.8% by the end of 2020.
  • Improved profitability is expected to be driven by healthy revenue growth along with productivity savings.
  • The recently announced 2019 Productivity Plan, under which PepsiCo will leverage new technology and business models to further simplify, harmonize, and automate processes, and in addition optimize its manufacturing and supply chain footprint, is likely to provide a further boost to the profitability of its already high-margin Frito-Lay segment.

E] Conclusion

Trefis estimates PepsiCo to add close to $4 billion in revenues over the next two years, out of which $1.3 billion (over 31%) is expected to come from Frito-Lay. As per PepsiCo Valuation (shows valuation analysis) by Trefis, we have a price estimate of $128 per share for PEP’s stock. Thus, the primary factor for the company to report a healthy revenue growth rate, improved profitability, enhanced shareholder returns, and elevated stock price, is a solid and sustained performance in the Frito-Lay division.

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Source: How Important Is Frito-Lay For PepsiCo’s Growth?

Pepsico Betting $3.2 Billion That The Future Of Soda Is Sparkling Water Made At Home With SodaStream – Maggie McGrath

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Pepsi is betting that the future of soda is at home and more in the realm of sparkling water than in aluminum cans laden with 41 grams of sugar: The beverage giant announced Monday morning that it is spending $3.2 billion, or $144 per share, to acquire at-home seltzer maker SodaStream.

The deal, which Pepsi plans to fund with its cash on hand, values SodaStream at a 32% premium to its 30-day volume-weighted average price and a 10% premium to its closing price on Friday.

“PepsiCo and SodaStream are an inspired match,” outgoing Pepsi CEO Indra Nooyi said in a statement Monday morning. “Daniel and his leadership team have built an extraordinary company that is offering consumers the ability to make great-tasting beverages while reducing the amount of waste generated.”

Added Daniel Birnbaum, SodaStream’s CEO: “I am excited our team will have access to PepsiCo’s vast capabilities and resources to take us to the next level. This is great news for our consumers, employees and retail partners worldwide.”

The marriage with Pepsi is a poetic turn for the at-home sparkling water maker; in 2012, Birnbaum told Forbes that the soft-drink and bottled-water industry was “flawed,” “broken,” “wrong,” “stupid” and “evil.” And though Birnbaum took an almost “if you can’t beat them, join them” approach in late 2014 when he struck a deal with Pepsi to test at-home versions of Pepsi and Sierra Mist

(A move that followed months of rumors that SodaStream was selling itself to the beverage giant), the company has in recent years been more focused on positioning itself as a “wellness solution” and a “leading manufacturer of sparkling water makers.” Instead of soda, it’s been marketing at-home seltzer—and the pivot has paid off in dividends.

SodaStream’s stock price, which was suffering at a mere $13 a share in early 2016, has gained more than 84% in value in 2018 alone. In its most recent quarterly earnings report, SodaStream reported quarterly profit that was double that of the Wall Street estimate; the company also tripled its earnings forecast for the year.

The focus on sparkling water is also a key reason Pepsi is so willing to bet billions on the company. As consumer tastes have shifted away from soda, Pepsi has been trying to establish itself in the seltzer arena with its line of Bubly sparkling waters (it launched the brand this February, one year after launching premium bottled water LIFEWTR). The SodaStream acquisition will increase its foothold in this part of the market.

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world,” Ramon Laguarta, Pepsi’s incoming CEO, said in a statement Monday.

The transaction, which CNBC reported came together in a matter of weeks, is expected to close by January 2019.

Wall Street, meanwhile, is happy with what it sees, sending SodaStream shares for a 10% gain in Monday’s pre-market trading session. Pepsi, meanwhile, is up just half a percent in pre-market trading.

 

 

 

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