You might imagine that the stocks of Coca-Cola (NYSE: KO) and PepsiCo (NASDAQ: PEP) move together. After all, both have stood out over the years selling soft drinks.
But it's not quite that way. Coca-Cola's stock has outperformed Pepsi's over the past year, rising 14% while Pepsi's fell 26%. In the past, there have been periods when Pepsi performed better than Coca-Cola.
In reality, the variety of products from the two companies is quite different. Coca-Cola sells only beverages, including the soda that bears its name, Sprite, and Jack Daniel’s whiskey. Meanwhile, about 60% of Pepsi's revenue comes from snacks, such as Frito-Lay, Doritos, and Cheetos.
But health-conscious consumers are increasingly avoiding these foods, which are generally considered unhealthy. Pepsi's organic food revenue in North America fell 2% in the first quarter compared to the previous year. Even in the beverage area, Pepsi's organic sales in North America grew only 1%, compared to 3% for Coca-Cola.
Coca-Cola's total organic revenue increased 6% in the first quarter, while Pepsi's rose only 1%. Coca-Cola has been reaping the benefits of its strategy focusing on sugar-free revenues, flavor innovations, and packaging.
