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Pepsico, Inc. Message Board

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  • azalphainvestor azalphainvestor Sep 5, 2002 9:24 AM Flag

    Something stinks here.

    Your pts are well made. And I do not claim exactititude. So let me add some rational and you are quite correct, this will apply only to soft drink division.

    The costs associated with ramping out a new product, here it is Pepsi Blue are much greater than average. When that product is a bust, the costs are not recovered and instead of a positive addition to the bottom line, they are a negative. Here instead of adding perhaps 5-7 percent to the bottom line in beverages, they will cause a lets say a 15 percent drag or increase in net costs.

    While you are quite right, this will result is smaller overall impact on the company bottom line, I still see the impact on the franchise brand, Pepsi, as being very damaging. But thank you for the excellent criticism.

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