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TLStockPicks (94.19)

Get 'em while they're young!

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March 16, 2010 – Comments (1) | RELATED TICKERS: PEP , KO

Pepsi announced today that it would continue its campaign against kiddie-fatness by pulling soft drinks from schools in over 200 countries. http://www.google.com/hostednews/ap/article/ALeqM5j9yETrgC-O9l18PFLBkjhfjYfSOgD9EFPNV03

I'm not a fan of this move.  There's no better time and place to get societies addicted to sweet succulent bubbly refreshments other than school.  Soda drinkers are like cigarette smokers; those who smoke/drinksoda early will be the smokers/sodadrinkers of tomorrow.  So in addition to the direct effect on revenue from choking off this distribution channel (and no, you can't replace a Pepsi with Aquafina to counter this effect), there will also be a longer term effect on revenues due to fewer Pepsi-addicted adults in the future who will have grown up cracking open ice cold Mountain Dews to calm the nerves at the one place where they spent most of their weekdays and were most stressed out.

Yes, I know that Pepsi did away with soft drinks in the US in the past few years and that the company's still performing beautifully.  But we haven't had time yet to see the long term effect of losing the childhood addiction factor.  And now they're doing this in over 200 other countries?  Those markets already favor Coke widely over Pepsi due to the discrepancy in branding and image.  Even if Coke follows suit and pulls their products from school, the lack of Pepsi's imaging/branding efforts focused on the children will make it tougher for Pepsi to chip away at Coke's market dominance in these foreign markets.  Cmon, Ms. Nooyi.  Tell me you have a backup plan, like Pepsi-laced blood being supplied to the hospitals of these countries.  Get those kids hooked!

1 Comments – Post Your Own

#1) On March 16, 2010 at 5:44 PM, TLStockPicks (94.19) wrote:

Whoops, first sentence of the second paragraph should read "Pepsi did away with soft drinks in the US **schools**" FFS motley fool, how about a freggin edit button? 

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