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Full disclosure: in the Pepsi challenge, I prefer Coke. In terms of investments, though, I overwhelmingly prefer PepsiCo (NYSE: PEP). The shares have fallen hard from their January 2008 peak, but PepsiCo won some respect on the Street recently for fearlessly backing its 2008 earnings outlook -- rather than dramatically slashing it, which has become the latest trend among companies large and small.

In the U.S., firms that produce fizzy beverages, snacks, and convenience foods nearly qualify as defensive stocks. Just check out some of the workhorses in Pepsi's product line: Cheetos, 7 Up, Doritos, Aunt Jemima, Quaker Oats, Gatorade, Rice-A-Roni, Fritos, and Rold Gold pretzels. Not to diminish some of the greater accomplishments our country can claim, this list is comprised almost entirely of prepackaged American icons.

Of course, we live in a global economy, and PepsiCo knows it. While Coca-Cola (NYSE: KO) has caught plenty of flack for environmentally unfriendly practices, Pepsi has been a corporate leader in the push for more "green" technologies ... which brings me to my affinity for Chairman and Chief Executive Indra K. Nooyi.

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.