Slide 1

THE COLD DRINK WAR

The ultimate battle of two major players competing for the top spot in a massive global market.

The cola and carbonated beverage industry reaches to virtually all corners of the planet, and the vast majority of the market share belongs to the two giants Coke and Pepsi.

With such a huge market and enormous revenue potential in an industry such as this, it is no wonder that the Coke vs. Pepsi competition is so fierce.

Origin

Coke and Pepsi were both created before 1900.

Coke was invented in Atlanta by pharmacist John Pemberton in 1886.

Pepsi also was created by a pharmacist--Caleb Bradham from New Bern, North Carolina, in 1898.

The formula

Coca-Cola Original Formula:

Coca-Cola contained coca leaves and kola nuts, known to promote energy.

Coca leaves, from which cocaine derives, was a primary ingredient, but were fully removed from the formula by 1929.

Pepsi-Cola Formula:

The premise of the original formula is the ingredients emulated Pepsin, and digestion aid.

It did not contain kola nut.

Coke vs Pepsi: Taste

Coke vs Pepsi blind taste tests have also proven unsuccessful in determining a clear cut winner.

Both companies have used them, as well as independents.

The results are typically very even, with about half the votes going to both Pepsi and Coke.

What is interesting to note is that in a Coke vs Pepsi blind taste tests the voting results are almost always 50/50 split.

Celebrity spokespersons

CokePepsiSelenaCuba Gooding Jr.Jerry Mathers and Ken OsmondTina TurnerDavid Liesure Ray CharlesRay Parker, Jr.Spice GirlsTelly SavalasBritney SpearsWierd Al YankovicJennifer Lopez and Beyonce KnowlesCourteney Cox Arquette Justin Timberlake and Luke RosinDavid ArquetteVan HalenPenelope CruzRanbir KapoorGenelia De SouzaImran Khan

Products

It was Pepsi first which understood varied needs of Indian taste and introduced various India centric products like Kurkure and Lays with Indian flavours .

On the other hand Coca Cola considered India as a regional outpost until last year, but after the economy toppled else where they should take India seriously from now on.

Now there are two other sections where they both are competing- energy drinks and Lemon water/mango juice/other juice.

Pepsi entered into market with Nimbooz which was success, and hence Coke is planning to launch Minute Maid Nimbu Fresh this year.

Coke is also launched its energy drink Burn last year to enter into the Rs 250 crore energy drinks market. This whole thing proves that Coke is finally getting its act right to become the number 1 Beverage player in India.

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Financial comparision

Over the last several years, Coca Cola stock has significantly outperformed PepsiCo.

Coke delivered a 52% return to investors while Pepsis 13% return paled in comparison.

Coca Colas market cap is currently 33% higher than Pepsis.

Coke has a current ratio of 1.279 while Pepsi is at 1.436.

Pepsi currently generates over 40% more revenue than Coca Cola over the past three years.

Its also important to note that there is less risk to Pepsis revenues given their more diversified product portfolio.

Based on their financial statements, in the last three years

Return on assets: Coca Cola : 13.82%, 14.33% and 14.02%. PepsiCo : 16.34%, 14.29% and 14.92%.

The return on equity: Coca Cola : 29.24 PepsiCo : 36.03

The Dividend payout ratio Coca Cola : 53%PepsiCo : 47%

The price/earnings ratio Coca Cola : 19.7 PepsiCo : 16.3

The Return on Assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. ROA = Net income / Total Assets.

The Return on Equity is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporations profitability by revealing how much profit a company generates with the money shareholders have invested. Return on Equity = Net Income/Shareholders Equity.

The Dividend Payout Ratio means the percentage of earnings paid to shareholders in dividends. The payout ratio provides an idea of how well earnings support the dividend payments. Dividend payout ratio= Dividends per share / Earnings per share.

The price/earnings ratio (P/E) is the best known of the investment valuation indicators. The P/E ratio has its imperfections, but it is nevertheless the most widely reported and used valuation by investment professionals and the investing public. P/E = Market price of share/Earning per share

THE LOGO WAR

Source:

www.Trak.in

www.Coke vs Pepsi.net

www.WordPress.com

Thank You

ROSHANKUMAR Roshankumar S Pimpalkar