Pepsi just ceded second place to Dr Pepper, but it still owns three brands in the top nine. It only took more than 100 years to finally take second place.
For over a century, Coca-Cola (KO) and Pepsico (PEP) have battled for dominance in the carbonated beverage market, often referred to as the Cola Wars. However, recent data from The Wall Street Journal reveals a surprising shift: Dr Pepper, owned by Keurig Dr Pepper (KDP), has now edged out Pepsi for the second spot in the carbonated beverage charts.
Market Shift Details
In 2023, both Pepsi and Dr Pepper held an 8.3% market share, with Dr Pepper slightly ahead when adjusted for decimal places. This marks a significant change from 2000, when Pepsi had a 13.5% market share compared to Dr Pepper’s 6.3%. Coca-Cola remains the market leader with a 19.2% share.
Dr Pepper’s rise to second place reflects its growing sales volume. Keurig Dr Pepper boasts a diverse portfolio including brands like 7UP, Green Mountain Coffee, and Canada Dry. Over the past five years, Keurig Dr Pepper’s earnings per share have more than doubled, and the company has grown its dividend rate. Despite this, its stock price has remained stable, making it cheaper now than five years ago. With a current dividend yield of 2.5%, the company presents an attractive opportunity for investors.
Pepsi’s Position
Pepsi’s slip to third place doesn’t spell trouble for the company. It still owns top beverage brands like Mountain Dew and Diet Pepsi. Additionally, Pepsi’s strong portfolio of snacks, including Frito-Lay, contributes significantly to its profits. In Q1 2024, Frito-Lay North America accounted for 57% of Pepsi’s operating profit. Pepsi continues to grow its profits, especially in international markets.
Investor Takeaways
While Dr Pepper’s second-place finish is notable, it alone isn’t a reason to buy Keurig Dr Pepper stock. Investors should consider the company’s potential for portfolio growth and profit increases. Similarly, Pepsi investors should remain confident in their holdings, as the company’s diverse product range and strong market presence ensure its continued success.
Dr Pepper’s rise is a significant milestone, but both Keurig Dr Pepper and PepsiCo remain strong investment options with growth potential.
