Monster Beverage Corp (MNST), The Coca-Cola Company (KO), PepsiCo, Inc. (PEP): Will These Soft Drink Companies Go Flat?

Dr. Pepper also followed Coca-Cola and PepsiCo, Inc. (NYSE:PEP)’s lead by introducing Dr. Pepper Ten, which offers all 23 flavors of Dr. Pepper with only ten calories per can. By brands, only sales of Snapple and Mott’s grew from the prior-year quarter while all other brands declined. Hawaiian Punch fared the worst, reporting a 7% drop. Just like its rivals, Dr. Pepper released an energy drink, Venom, which unsurprisingly failed to make an impression with Monster and Red Bull drinkers.

Dr. Pepper is stuck in a nasty spot — it lacks the niche appeal of Monster Beverage, and its portfolio of drinks is less popular worldwide than Coca-Cola’s and PepsiCo’s established brands. Those factors make Dr. Pepper more vulnerable to the macro challenges that are crimping top and bottom-line growth across the industry, and arguably make it the worst choice of the big three soft drink makers.

The Foolish Takeaway

Soft drinks and energy drinks just aren’t the attractive businesses that they were five years ago. Both domestic and international customers are becoming more health conscious. In addition, unfavorable weather conditions, rising commodity costs, and a strong U.S. dollar are all contributing to industry stagnation.

Although Monster Beverage has been able to grow despite these challenges, it still faces questions about the safety about its products, which could cause serious short-term volatility. However, that’s not to say that these four companies are terrible investments — they just aren’t likely to outperform the broader market in the near term.

The article Will These Soft Drink Companies Go Flat? originally appeared on Fool.com and is written by Leo Sun.

Leo Sun owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola, Monster Beverage, and PepsiCo. The Motley Fool owns shares of Monster Beverage and PepsiCo.

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