Sales of Energy Drinks Slowing (KO, PEP, DPS)
Nielsen data reported on Friday that beverage companies including The Coca-Cola Company (KO), PepsiCo, Inc. (PEP) and Dr Pepper Snapple Group Inc. (DPS) saw slower energy drink sales in the 4 weeks ended May 11th.
The firm reported that energy drink sales rose just 4.3% during the period, compared to an average 11.6% increase over the past four years.
Wells Fargo analyst Bonnie Herzog commented, “Red Bull posted +9.7% $ sales growth, most likely led by new SKUs, as its Red Bull and Diet Red Bull both posted negative $ sales growth. Monster Beverage (Nasdaq: MNST) posted the lowest $ sales growth results we have seen, +5.1% for period. Pepsico, Inc. (NYSE: PEP) and Dr Pepper Snapple Group, Inc. (NYSE: DPS) energy drinks continue to underperform the category, with $ sales changes of -18.1%, and -27.7%, respectively, while The Coca-Cola Company (NYSE: KO) energy drinks posted a strong +5.4% $ sales growth.”
The decline in sales is partially a result of campaigns against high caffeine content as well as high profile lawsuits against energy drink makers.
Both Coca-Cola and Pepsi have been expanding their presence in the energy drink market as soda sales have continued to fall. Pepsi’s Amp energy drink has about a 3% market share, while Coca-Cola’s Full Throttle has market share of approximately 1%.
Coca-Cola shares were down 40 cents, or -0.98% during Friday afternoon trading. The stock is up 11% YTD.
Pepsi shares were mostly flat during Friday afternoon trading. The stock is up 19% YTD.
Dr Pepper Snapple shares were down 40 cents, or -0.85% during Friday afternoon trading. The stock is up 5% YTD.
The Bottom Line
Shares of The Coca-Cola Company (KO) have a 2.77% yield, based on Friday afternoon’s price of $40.41.
Shares of PepsiCo, Inc. (PEP) have a 2.79% yield, based on Friday afternoon’s price of $81.24.
Shares of Dr Pepper Snapple Group Inc. (DPS) have a 3.26% yield, based on Friday afternoon’s price of $46.60.
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