PepsiCo, Inc. (PEP), The Coca-Cola Company (KO): Is the Soda Industry Fizzling Out?

Most recently, Coke gained a majority stake in Zico coconut water, a promising niche beverage touted for its hydrating electrolytes and nutrition. Zico tripled its sales between 2010 and 2011, a time when Coca-Cola owned a minority stake. Currently, only 3% of U.S. households buy coconut water, so the upside potential for the makers of this natural beverage is huge.

As the market continues to robustly grow, coconut water wars may strangely enough one day replace cola wars. Not surprisingly, big cola currently controls rival coconut waters. After a failed partnership with GNC Holdings Inc (NYSE:GNC) to produce coconut water, PepsiCo got it right with O.N.E., currently the No. 3 selling coconut water brand in the U.S. behind Dr Pepper Snapple Group (NYSE:DPS)’s No. 1 Vita Coco and Coke’s No. 2 Zico.

The article Is the Soda Industry Fizzling Out? originally appeared on Fool.com and is written by Nicole Seghetti.

Fool contributor Nicole Seghetti owns shares of PepsiCo and Mondelez International. You can follow her on Twitter @NicoleSeghetti. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of PepsiCo.

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