PepsiCo encroaches on Coke's turf at McDonald's

Posted Mar 13th 2007 8:15AM by Jonathan Berr
Filed under: Before the Bell, Deals, Industry, Consumer Experience, Competitive Strategy, Coca-Cola (KO), PepsiCo (PEP)

PepsiCo. Inc. (NYSE:PEP) is encroaching on Coca-Cola Co.'s (NYSE:KO) turf at McDonald's Corp. (NYSE:MCD).

Some McDonald's restaurants are selling Pepsi's Gatorade, Propel Fitness Water, Lipton Iced Tea, Tropicana orange juice, and Mountain Dew, according to the Associated Press. McDonald's had sold Coke's products exclusively since 1955, the AP said.

This is obviously a huge win for Pepsi. Demand for non-carbonated beverages is rising at a much faster pace than soda. It's the latest front in the cola wars. This will certainly help Pepsi over the long term.

Investors, though, continue to bet on Coke. Its shares have jumped 12 percent this year compared with 5 percent for Pepsi. Going forward, it's a different story.

Fourteen out of 16 analysts rate Pepsi shares either a buy or a strong buy. Two rate it a hold. Their median price target is $73 about $10 above were it currently trades.

Analysts are expecting on average for Coke to hit $53 in the next year, about $5 above its current price. Twelve out of 17 analysts rate Coke either a buy or strong buy and five consider it a hold.

Tags: coke, cola, cola wars, ColaWars, fast food, FastFood, mcdonalds, mountain dew, MountainDew, non-carbonated beverages, Non-carbonatedBeverages, pepsi, soda

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Reader Comments (Page 8 of 8)

141

3-14-2007 @ 2:16PM

heather said...

#14 I absolutely agree. McDonald's had the best soda fountain compared to any of the fast food chains. I don't eat fastfood but I love their soda. It's the best, I go out of my way too for it.

142

3-14-2007 @ 2:16PM

Carol Midgley said...

I believe the worse thing McDonald's can do is turn to a Pepsi product. The taste of pepsi, is no where near what Coca-Cola offers. I will not buy a pepsi product at McDonalds, will stick with water, thank you.

143

3-14-2007 @ 3:06PM

Christy said...

AAACK! Pepsi!!!
That said, I am very much a Diet Coke drinker. I only go to restaurants that serve Diet Coke. I think Pepsi and Diet Pepsi taste disgusting....but I never go to McDonalds, anyway.

144

3-14-2007 @ 2:43PM

D.C. said...

Pepsi Rules !!!!!!!!!

145

3-14-2007 @ 2:53PM

Jennifer said...

I would hope that McDonalds keeps Coke and some Pepsi products as well. I prefer Coke over Pepsi but Mountian Dew (IMO) is much better than Mellow Yellow. Most of the fast food restaurants that I've eaten at in Texas serve Coke products and Dr. Pepper(because it's manufactured in TX).

146

3-14-2007 @ 4:03PM

Nelson Terrell said...

If McDonalds pushes Pepsi products they will NEVER get another penny out of my pocket!!!! Pepsi's new logo on their can leaving out "Under God" is one big slap in Americas face. Not wanting to offend anyone by including that is nothing but BS! If it offends someone they should get back on the boat or plane that brought them here. Now knowing Pepsi Corp. thinks this way, they will not get anything from me that has "In God WE Trust" printed on it.

147

3-14-2007 @ 5:05PM

ROSEMARIE said...

I HAVE ALWAYS LOVED COKE PRODOCTS, HAVE TRYED OTHERS BUT STICK WITH COKE. JODY

148

3-15-2007 @ 7:09AM

theos_7 said...

i really wish both of them would quit shoving their poison in the form of Nutrisweet down our throats. I purposely avoid all of the 'diet' drinks since i educated myself on the hazards of Aspartame. Restaurants give you a choice, pink (saccharin) or blue (equal), why don't we have that choice on soft-drinks anymore? Coke needs to bring Tab back for starters. Saccharin was unfairly slandered back in the 80's simply to force Nutrisweet which HAS been proven a hazardous neurotoxin, on the public. I wonder sometimes if the spike in autism and other diseases is linked to Nutrisweet.