Even in a recession, people will "snack" themselves to the point of sugar highs so powerful that they will think the economy is still expanding. According to Reuters, "PepsiCo (NYSE: PEP) expects its business based on "comfort foods" to be resilient to a U.S. economic slowdown, Chief Executive Indra Nooyi said on Wednesday."

The point is probably well-founded. Soda and chips are still something people can enjoy for a few dollars. And many people are addicted to the sugar and salt. And it makes Pepsi and rival Coke (NYSE: KO) effective hedges against a downturn.

Pepsi sells for just over $69 now, down from a 52-week high of almost $80. It has a yield of 2.1% and $2.2 billion in cash and short- term investments. The company has an operating margin of about 20%. In the last quarter, operating income was $2.1 billion on revenue of $10.2 billion. Coke's financial dynamics look about the same.

All in all, this makes these stocks "safe" bets if the markets continue to fall.

Douglas A. McIntyre is an editor at 247wallst.com.

PepsiCo Inc. (NYSE: PEP) today reported better-than-expected third quarter results, helped by strong sales of healthy snacks and robust growth overseas.

Net income rose 17% to $1.74 billion, or $1.06 a share, from $1.49 billion, or 89 cents, a year earlier. Sales rose 11 percent to $10.2 billion. Excluding a one-time gain, the Purchase, New York company's results beat Wall Street expectations by 3 cents.

"Our third quarter performance was very strong, with double-digit revenue and operating profit growth," said Indra Nooyi, the company's chairman and chief executive in the earnings release. "All of the Company's operating divisions successfully navigated through an environment of higher input costs in order to deliver balanced top- and bottom-line performance."

PepsiCo reiterated its previous guidance for full year earnings of at least $3.35 per share and slightly rose its cash flow from operations forecast to be at least $7 billion. Capital spending is seen at about $2.6 billion.

PepsiCo (NYSE: PEP), is reaching for a market sector not usually attracted to diet drinks, young males, with the launch of a new product, Diet Pepsi MAX. The 'MAX' part that it hopes will appeal to this audience is additional caffeine, for that addictive buzz, along with a dash of ginseng for the psychosomatically-enervated. The drink is marketed as a pick-me-up, intended to draw on the success of energy drinks such as Red Bull among that target demographic.

The company is putting serious coin into the launch of what its hopes will become a key component of its product line. According to Advertising Age, we can expect to see $55 million worth of advertising supporting the launch, as much as triple its normal launch budget. Pepsi has also set up the de rigueur web site, www.Wakeuppeople.com, where those who never tire of marketing can indulge their thirst for it.

The campaign will use the tag line "Wake up, people," to accentuate its energizing properties. I suppose that's a better message than, "Wake up, people, you're paying a buck for a can of brown water."

Michael J. Fox. Michael Jackson. Madonna (for one brief flickering moment). While second-largest soft-drink concern PepsiCo (NYSE: PEP) isn't recruiting its 80s spokespersons back to the fray, the company is bringing back the old-fashioned taste test, in an effort to prove the flavor of Diet Pepsi superior to that of the better-selling Diet Coke - the second-most popular brand under the Coca-Cola (NYSE: KO) umbrella.

Starting today, PepsiCo will be handing out samples of Diet Pepsi, in newly designed cans, and boasting the claim that their calorie-free product has "more cola taste." A recent taste test, reminiscent of the familiar "Pepsi Challenge" from days of yore, yielded positive results, with 56% of respondents believing Diet Pepsi tasted more like "real" (full-calorie) cola, while 41% preferred Diet Coke.

Sales of diet soda are on the decline, as sports drinks and bottled water gain popularity, but the Diet Pepsi brand is losing momentum at a faster clip than Diet Coke. According to an article in today's Wall Street Journal, unit case volume of Diet Coke slipped 0.1% in 2006; Diet Pepsi volume dropped 1.0% last year.

The once-proclaimed "choice of a new generation" has an uphill battle ahead of it . In our "Battle of the Brands" feature last month, Pepsi was felled by Coke, 41% to 59%.

Maybe the Diet brand will have better luck.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

PepsiCo Inc.'s (NYSE: PEP) first quarter profit rose16% due to the strength of its international beverage division as well as solid growth in the Frito-Lay snacks division. First-quarter revenue of $7.35 billion provided a healthy profit of $1.1 billion for the quarter, up from $6.72 billion and $947 million respectively for the year-ago quarter.

PepsiCo's management reaffirmed guidance for the full year at $3.30 EPS, a tad under consensus analyst estimates of $3.32 EPS. The second-largest beverage maker in the world behind Coca-Cola Co. (NYSE: KO) witnessed its international beverage revenue climb in the first quarter while rose by 29%. The Texas-based Frito-Lay division saw a 7% gain in profit for the first quarter as well.

Stay tuned to BloggingStocks this morning at 11:00am PDT as I'll be liveblogging the Q1 conference call right here. The best parts (most of the time) are deep analyst questions at the end of the call (during the Q&A), so I hope you'll join me here in about two hours.

I remember the first time I saw excessive drinking of diet soda. See, we mostly drank water in my parents' home, so I got used to that. One day, during lunch at a a friend's who was always on a diet, I noticed she was drinking diet Coke (or Pepsi, I can't really remember). Responding to my inquiry, she explained that she'd rather spend the calories allotted to her in her diet on food rather than on drink.

Well, today I've read about this fascinating study that found that liquids make up 22% of calories in the average American's diet. Meaning that while many Americans only count calories from food, in fact, many of their daily calories are comprised of drinks -- 22% of them.

Apparently, Americans drink on average 38 ounces of water (zero calories), followed by 17.5 ounce sugary soft drinks, 7.5 ounces of milk and 8.9 ounces of coffee daily. 6.4% of Americans' diet is made up of soft drinks, while the percentage is higher for teenagers.

This trend might be declining as health and wellness awareness have increased in the past decade. This trend along with some schools removing vending machines containing full sugar soft drinks also caused companies such as PepsiCo Inc. (NYSE:PEP) and Coca-Cola Co. (NYSE:KO) to release healthier products.

There have been many controversies concerning sweeteners so I'm not sure that having so much artificial sweeteners such as aspartame or saccharin in one's diet is that healthy either. Regardless, it seems that my friend was right: Don't forget to count your drinks when dieting. Alas, this goes for beer and martinis as well...