PepsiCo To Launch Cane Sugar-Based Prebiotic Cola This Fall To Counter Declining Soda Consumption
PepsiCo Inc. (NASDAQ:PEP) announced it plans to introduce a prebiotic cola under its flagship soda brand, a move aimed at reversing the declining sales of its beverages in the U.S.
What Happened: The new product, Pepsi Prebiotic Cola, is expected to hit the market this fall. This development comes shortly after Pepsi acquires Poppi, a rising star in the prebiotic soda space, for $1.95 billion in May.
Check out the current price of PEP stock here.
This move is part of PepsiCo's effort to attract health-conscious consumers amid weakening demand for its drinks in North America, where beverage volume fell 2% in the second quarter.
Poppi and other emerging brands like Olipop have been successful in attracting health-conscious consumers with their gut-health claims, despite a general decline in soda consumption in the U.S. spanning the past two decades.
Pepsi's launch of a prebiotic soda reflects its broader strategy to capitalize on health-focused trends like protein and fiber, aiming to retain customers amid declining domestic demand for its beverages.
The new Pepsi Prebiotic Cola will contain three grams of prebiotic fiber, one gram more than Poppi’s soda, but significantly less than Olipop’s fiber content. It will also contain five grams of cane sugar, a departure from the corn syrup used to sweeten classic Pepsi in the U.S.
Why It Matters: The introduction of the prebiotic cola is part of Pepsi’s broader strategy to adapt to changing consumer preferences. The company has been focusing on health-conscious products, evident in its $2 billion permissible snack portfolio, which has been performing well.
Despite the declining sales of its beverages in the U.S., Pepsi’s stock price has been showing signs of recovery. After a significant sell-off, the stock price hit historical lows, offering a buying opportunity. The recent developments, including the introduction of the prebiotic cola, could further boost investor confidence in Pepsi’s future performance.
Meanwhile, President Donald Trump recently announced that Coca-Cola Co. (NYSE:KO) has agreed to use real cane sugar in its U.S. products, a move that could potentially impact Pepsi’s strategy in the mainstream soda market.
Benzinga Edge Stock Rankings shows that Pepsi had a stronger price trend over the short and medium term but a weaker trend over the long term as per Benzinga's Proprietary Edge Rankings.
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