Emerging markets lift PepsiCo sales

By staff reporter

- Last updated on GMT

Related tags: Pepsico, Coca-cola, Gatorade

Emerging markets across Asia, Eastern Europe and Latin America came
good for both PepsiCo and Coca-Cola in 2005, increasing their
importance in the two rivals' growth strategies.

PepsiCo's international division saw a 13 per cent sales rise in 2005, helping the firm to continue asserting its dominance over Coca-Cola with a 10 per cent sales rise to $32.5bn over all. Coke said Tuesday it had managed a six per cent increase.

Both firms, however, recorded encouraging performances across emerging markets, particularly for their struggling fizzy drinks brands.

Pepsi said China, Argentina and the Middle East in particular led to a fight-back from its carbonated soft drinks range, which posted double-digit growth alongside non-carbonated beverages for the full year.

The group also recorded strong snacks growth across Russia, Turkey, Mexico and India - helping to offset problems for its Walker's crisps brand in the UK.

Coke, meanwhile, said strong volume growth for its Coke and Sprite brands in China helped the firm to its strongest growth in carbonated drinks for several years.

The firm's marketing push in Russia, as well as its takeover of the country's leading juice maker, Multon, also contributed to an above-average seven per cent sales rise across the North Asia, Eurasia, Middle East region in 2005.

Asia Pacific was the best area performer for Pepsi, with China leading the way.

The firm's sales jumped 16 per cent for the region last year, and the group announced in January it planned to spend another $850m to develop its soft drinks and snack foods businesses in China over the next three years.

There were signs that long-term carbonated drinks growth in China may, nevertheless, come under pressure from consumer health trends as already seen in developed markets.

Non-carbonated beverages from both Coca-Cola and PepsiCo matched, and even out-performed in places, their fizzy counterparts in the country.

Elsewhere, PepsiCo's figures showed no signs of a let-up in the consumer shift towards non-carbonated beverages. The group's Gatorade sports drink as well as Aquafina and Propel fitness water were its star performers in North America, offsetting a dip in fizzy soda sales.

Steve Reinemund, PepsiCo chief executive, said he was confident the group would maintain its momentum in 2006. Pepsi's net income dropped from $4.2 to $4bn in 2005, but increased 13 per cent in the fourth quarter.

Related topics: PepsiCo

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