Pepsico did better than analysts expected: rather than the predicted $1 per share, it posted $1.06;. A step up from last year's dividend of $1.05, this represents a 2.5 percent drop in shares outstanding. Part of this relative success is due to the company's release of G2, a lower-calorie Gatorade substitute that had double digit sales growth. Even so, the company's expensive Tropicana and Gatorade brands have been recession victims, leading the way on its losses.
Pepsico has stated that it expects 2009 profits to grow by a single digit percentage. To achieve this, it will release new products, increase cost controls, and implement a new pricing strategy. It has also gained a 20 percent share in Calbee foods, Japan's top snack company, a move that is expected to boost revenue considerably.

Still, for all its optimism, the brand of the next generation is trailing behind the "real thing." While Coke's earnings of 88 cents per share weren't as impressive as Pepsi's, its 44 percent jump over 2008 was very eye-catching. Like Pepsi, Coke is seeking to expand its brand across the globe, perhaps reflecting a domestic market that is reconsidering its addiction to sticky-sweet soft drinks.

With this in mind, one could argue that Pepsi is better positioned than its rival. Although Coke is attempting to expand its offerings in the "still beverage" market, Pepsico's dazzling array of teas, sports drinks, and juices seem to be setting it up to benefit from the movement toward less artificial beverages. Although Tropicana and Gatorade are dragging the company down right now, they are still the most prominent brand names in their segment; consequently, it seems reasonable to expect that economic improvement will bring customers back from whatever "brand X" they are currently consuming. Moreover, the "throwback" cane sugar-based sodas that the company is releasing should also help it catch and maintain the interest of customers who are increasingly wary of artificial sweeteners. All told, Pepsi should be well-positioned to track with its demographic as healthier choices continue to become more popular.