In its recent quarter, PepsiCo's cost of goods sold soared 22% to $5.45 billion, though the figure took up a smaller percentage of total revenue year-over-year. PepsiCo turned to improved operational efficiencies and price increases to help offset those costs, but CFO Hugh Johnston conceded that pricing in the first half of the year "has not been what we would have liked or expected."
Dr Pepper Snapple said it would raise prices and implement other cost savings initiatives in an effort to offset higher costs. Despite higher costs, PepsiCo reaffirmed its 2011 outlook for earnings growth between 7% and 8%, indicating a range between $4.42 and $4.46 per share, lower than analysts' consensus for a full-year profit of $4.49 per share. PepsiCo said its forecast included "high global commodity cost inflation, difficult macroeconomic conditions in developed markets and ongoing strategic investments in emerging markets and in brand-building activities." A roster of food and beverage companies from McDonald's ( MCD) and Hershey ( HSY) to Kraft Foods ( KFT) and Starbucks ( SBUX), as well as consumer goods companies like Procter & Gamble ( PG), Hasbro ( HAS) and Colgate-Palmolive ( CL), have reported in recent months that
Beverage Digest released the report, noting that regular Coke continued to outpace by far in 2010, with 1.59 billion cases sold last year for 17% of market share. Diet Coke sold 926.9 million cases last year, or about 9.9% of total market share, topping Pepsi-Cola's 891.5 million cases, or 9.5% of market share, Many industry watchers hailed Coke as the clear winner on the decades-long cola wars. Rounding out the top 10 list, in order, were Mountain Dew, Dr Pepper, Sprite, Diet Pepsi, Diet Mountain Dew, Diet Dr Pepper and Fanta. Coke, Diet Coke and Pepsi-Cola each sold fewer cases in 2010 than in 2009, but Pepsi-Cola saw the steepest decline. Regular Coke sold 0.5% fewer cases year-over-year, Diet Coke 1% fewer and Pepsi-Cola 4.8% fewer. Credit Suisse analyst Carlos Laboy said in a research note that he was "worried about the morale implications for PepsiCo's beverage people of having the company's namesake brand and its top beverage brand dropped to a tertiary spot within its category at a time that a tangible sign of brand momentum for the core brands would help."
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