As the summer approaches, an increase in demand for soft and sparkling beverages should bode well for beverage companies. With outdoor recreation and workout participation increasing following widespread vaccination, energy drink and soft drink sales are expected to get a solid boost. The trend of customization based on ingredients and dietary requirements should drive the demand for innovative products offered by PepsiCo (NASDAQ:PEP) and Coca-Cola (NYSE:KO) Consolidated (COKE). But let’s find out which of these stocks is a better buy now.PepsiCo, Inc. (PEP) and Coca-Cola Consolidated, Inc. (COKE) are two of the largest non-alcoholic beverage manufacturers, with a broad portfolio of soft drinks. PEP operates through – Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America, among other segments. COKE sells sparkling beverages, still beverages, including sports drinks, ready-to-drink coffee, and tea. Additionally, COKE distributes products for other beverage brands such as Dr. Pepper and Monster Energy.
With the onset of summer, the demand for beverages is on the rise. More than 50% of Americans are being vaccinated by now, outdoor recreation activities are gradually increasing. This in turn should drive the demand for energy drinks and soft drinks. Non-alcoholic beverage manufacturers have been focusing on expanding their presence and introducing customized products based on specific requirements of customers, to meet the increasing demand. Two leaders in this space – PEP and COKE – have been ramping up their production to capitalize on the summer trend. Given their continued innovation and business expansion, we believe both companies have plenty of room to grow.
Over the past year, PEP has gained 11.8%, while COKE has returned 64%. In terms of the past month’s performance, COKE is the clear winner with 36.3% gains versus PEP’s 4.3% returns. But which of these stocks is a better pick now? Let’s find out.