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Foreign.
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This is the Breeze with Beverage Digest. I'm your host, Duane Stanford, the editor and publisher of Beverage Digest. The Breeze is where we bring you into the kinds of industry conversations we have every day at Beverage Digest. We dissect what's happening, connect the dots and ask the most important question. What does this mean? I'm joined, as always, by my friend and co host, Jon Sitcher. Many of you know him as a former editor of Beverage Digest. John has since consulted for companies ranging from Coca Cola to Pure Circle. John, hello. Good morning. How was your holiday, Dwayne?
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All good. Happy New Year to you. How's everything with you? How was your holiday?
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Same. Great, man. We had a good little trip to San Diego. It was fun. I tell you, I've been intrigued by all this Venezuela news. You know, Maduro's capture, it's been kind of an eventful start of the year. And you actually sent me this really fascinating story, you know, from the Venezuelan market way back in 1996, before my time in the industry, I was somewhat aware of it. But, you know, that was really pretty interesting what happened back then. Tell us a little bit about that. I'm interested in your take on the whole thing.
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Well, there was another capture about 30 years ago, and it was very, very big beverage industry news. Back in the 1990s, Venezuela was the 1 market in Latin America where Pepsi had a very significant share. And one day in August, we all woke up to the news that secretly Coke had signed up the Pepsi bottler and that overnight the Pepsi bottler owned by the Cisneros family, the Pepsi bottler became the Coke bottler. And Pepsi's share, which was significant, went to almost zero. And Coke basically gained a huge amount of share in Venezuela. It did not make for happy relationships between Coke and Pepsi. It was very embarrassing to Pepsi. Roger Enrico, who was running Pepsi back then, was a good Cisneros family and it was really quite a story. Anyway, the Cisneros family became the Coke bottler in Venezuela. And then of course, Pan Amco bought them out and then Femsa brought them out. So at least as of some point in time after that, Femsa, I believe, was a bottler in Venezuela. I'm not sure what's going down there, going on down there anymore in terms of the sale of US Soft drinks. But that the New York Times story was a Coke coup in Venezuela leaves Pepsi high and dry. It was some story 30 years ago.
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Yeah, that is just so fascinating. Now, of course, PepsiCo has reestablished itself in the market, but That's a really tough market because of inflation and some of the leadership there. So it'll be interesting. I saw a seeking alpha story that suggested that, you know, both of them might have a better time with their supply chains and, you know, if there's a little more stable leadership there. So we'll see. It's very interesting, though.
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It's not clear to me today whether more oil or soft drinks are being pumped in Venezuela, but I think it's a difficult market for everybody right now.
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Absolutely. So, you know. All right. So, John, today what we've decided to do is to look back together at some key stories from 2025 and just to remind ourselves what, what an amazing year. It's been, a very eventful year in beverages. And I think that always helps to kind of look forward and, and give us a sense of what to expect next and what some of the big issues will be in the coming year. So we got a lot to cover. So we're going to go pretty rapid fire. So if you're ready to rock, I'm ready to roll. You good?
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Well, I'm ready.
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All right. So speaking of Venezuela, by the way, you know, there's going to be a new CEO of Coca Cola that was announced some weeks ago. Enrique Braun is going to take the reins from John Quincy in March, and both of them actually joined the company in 1996, which is when that Venezuela story happened. So, you know, they've got a long history in Latin America, so I'm sure they're watching that really close. But any. What's your quick thought on, you know, new leadership at Coca Cola in the coming year?
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Look, I, you know, I admire the job that Quincy did in terms of the company's finances. He basically has been able to, in, you know, in the face of weak and declining volume, has been able to keep the company's financial momentum going. The stock price has performed well. I think the Coke. You know, Quincy basically ran this company for roughly 10 years and it's still roughly the same company that it was 10 years ago. It's still very CSD reliant. The FairLife has done well. Acosta obviously is not. Bodyarmor has not done so well. It's reported a lot of volume losses since Koch bought it. I am hoping that the new CEO will basically begin to diversify the company's portfolio. I think it basically, it really has to become less reliant on csds because I don't see much. I don't two things. I don't see much sign of CSD volume recovering. And I think the era of getting enough pricing to well offset weak volume is probably coming to an end.
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Yeah, I think Quincy's legacy probably includes Fair Life for sure. What's happened with Fair Life since building a new plant, looking to add even more capacity. Beyond that, I think he also changed the culture of the company in a pretty significant way in terms of saying that, look, we're going to experiment with some of the key flagship brands. We're not going to hew to the past so strictly, and we're also going to take some risks, some calculated risks, and be willing to end them quick if they don't work. I think all that's been good. I think also, you know, in terms of CSDs, I mean, look, CSDs are a market that's going to be difficult to grow volume in the kinds of ways that you have in the past. I do think, though, a lot of things they've done to maintain pricing power and, you know, you know, the fact that he's allowed the, you know, the bottling strategy to continue and to flourish, especially in the US has been advantageous. So I think he sets the stage well for, for Braun to come in Now. Braun, he's, you know, he did our conference in 2021 right out of COVID and I found him to be a very personable guy, very easy to talk to. What I hear just, you know, from people in the company is that, you know, he's well liked, been well received, he's able to kind of get down on a personal level with people. Those are always kinds of things, you know, you want to hear from CEOs and the kinds of things that kind of help rally the troops as well. So, you know, I think it'll be an interesting couple of years to watch him transition and see what sort of organizational changes he'll make. I expect there'll be some changes in January. You know, both Coke and Pepsi are working on, you know, doing some of the kind of restructuring you have in these kind of different, more difficult conditions, consumer environments and, you know, with pricing growth slowing. So he's going to have some of that to take care of here in the coming months and manage through over the next year. So it'll be an interesting year or two.
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It will be again, I think everything you said is correct. I agree with you. I think that Quincy basically, you know, if you look at the last couple of CEOs, Mutar. Mutar oversaw the refranchising, which was a huge change. Quincy, I think, basically ran the company and, you know, there was good stability. I think Coke now is in need of a change agent and I'm hoping that's what Enrique will basically do. I think that if 10 years, if 10 years from now, if 10 years from now, Enrique basically has done nothing to change the portfolio. I think Coke's going to be in a less strong place than it is today.
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So speaking of change agents, PepsiCo has had a bit of some leadership changes as well. Not at the very top, of course, but in a pretty key role. And that's PepsiCo Beverages US Ram Krishnan, who was just on stage with me at Future Smarts in December, was promoted that very day. In fact, as I was on stage, he was promoted to the CEO for North America. So Steve Williams is moving up to a broader role. So Ram Krishnan will now be in charge of North America food and beverage. And we talked a lot on stage about, you know, what's going to happen in terms of how they're trying to transform their portfolio. Folio. We'll get into energy drinks and sports drinks a little later. But any thoughts in general on Ram Krishnan and what he's got in front of him in terms of shoring up in part that North America beverage business now?
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You know, I think he's got a lot of work to do. You know, as the Beverage Digest data, the annual Data has showed, PepsiCo's North American business is not particularly strong right now. I think Pepsi, which was the number two brand of Coke for years and years and years, if my memory is correct, Dwayne, it's now below both Dr. Pepper and Sprite. It's Pepsi's flagship brand. Gatorade is not growing. And I think that basically they really have to basically take a good hard look at their business and do some very, very, very hard work reinvigorating it. They have been losing a share of the Coke and you know, it's time for the pendulum to start swinging back toward Pepsi. But they're going to have to do some work to make that happen.
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Yeah, I think Pepsi would argue that, you know, while brand Pepsi is now behind Sprite and Dr. Pepper, they look at, you know, trademark PepsiCo, they focus more on that because of the zero sugars there. So, okay, great. But that's a portfolio that also needs, needs some work. And you know, Ram Krishnan talked about some of the ways they're going to do that at the conference. And you know, I think it sounds like a good plan. So the question is, you know, what can you invest towards that and how can you execute against that? And I think that's what, you know, he's going to be watching very closely here, coming, going forward. And right now they're under pressure from, you know, activist investor Elliot Investment Management. You know, some of the pressure is kind of off right now because they've kind of got a plan together that Elliot seems to have signed off on in terms of how they're going to proceed. One of the very interesting things that Rahm reiterated at the conference was that, you know, a full refranchising is not under consideration. So a full refranchising of the US bottling system is not under consideration. He said they just, when they run the numbers, they just don't see the value creation by doing that, that they're gonna, that in essence what they're going to do is look at it on a more piece by piece basis where it makes sense. No real definition as to what that means exactly, like how far they'll go or not. My understanding is that Elliot wants a pretty meaningful amount of the system refranchised, but I think they're also given PepsiCo room to kind of figure that out. So I think there's going to be a, a lot more, you know, activity and discussion around that in the next year or so. But for now the company is saying don't expect a full refranchising. Is that, does that make sense?
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Yeah, I mean I think that, look, I think it's, I think it's be very difficult for Pepsi to do a massive refranchising. It took Coke a long time to do it and Coke had some very big bottlers that wanted more territory. Plus you know, they got new entrants like Reyes. You know, I think that Pepsi basically it would be very hard for them. But let me, let me take a step back for a minute. I'd like to know what you think of this. The last time Pepsi basically dealt with an activist investor, it was Nelson Peltz and try and what he wanted to do was split the beverage business off from the snack business. I've long believed that a pure play beverage company would be better for Pepsi. That they've got. The top management of PepsiCo today is running a beverage business which is basically not growing particularly is not growing very well. And the snack business has run into problems. Now in my view that if they split those two companies up and had good, smart, tough management running the beverage company and separate management running the snacks company, I think there's a good chance that the beverage business would do better what are your thoughts on that?
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I think there's no question a focused beverage business would do better. I think what they're looking at is the whole package. And what they seem to be saying is that when we run the numbers, the value creation by having the two together are greater than what, what you would get with Frito Lay and the food business separate and even theoretically an improved beverage business. I mean, I don't know. It's not. They're not laying that. That math out. Exactly. So, you know, is that. I mean, why would you argue that if you didn't have a real belief that that was true? Now, you may be wrong. I don't know. But I think that's kind of a separate question than whether if the beverage business was spun off, would it do better? I don't know how it couldn't, frankly. But that doesn't seem to be, you know, where Pepsi, PepsiCo's head is. They seem to be looking at the value creation from both pieces, whether together or separate, for investors right now. Elliot seems to be giving them room to kind of maintain that thinking. I mean, if. If you think about it, and they're not even. They're not even arguing for a split of the beverage business the way Pelts did. They're just saying refranchise a significant portion of it.
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Look, you know, I followed PepsiCo for many, many years during the years that I had Beverage Digest, and they've been. They've been trying to figure out how to create synergistic value between the snacks business and the beverage business for many, many, many years. I remember a long time ago, a guy named Al Carey, who many of your podcast listeners will remember. His job was to basically head up Power of One and try to figure out how they could basically create value by having a more synergistic relationship between their two businesses. Perhaps I'm being cynical, but I have not seen any success in that all the years they've been trying to do it.
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Well, what's interesting is this also comes at a time when we've seen another major beverage player, kdp, plan a split of their company. So they've got a coffee business and a refreshment beverage business driven very heavily by carbonated soft drinks and the Dr. Pepper brand. What they've decided is those now need to be separate, so they're sort of going the opposite way in some ways. And, and they're. They're looking to, you know, have everything poised for a split by the end of 2026. Analysts, you know, have said Basically, they think it's going to be. Komal Garzhwala at our conference said it, you know, he thinks it's going to be real tough to get that done before 2027. It's just a very massive undertaking. A lot of financial management going on there, a lot of stuff, you know, that's, you know, very heavily, you know, Wall street and bankers and all that. But if we bring it down to the beverage level, the kind of stuff we look at every day, I guess the question is, how much disruption are we going to see for this juggernaut, Dr. Pepper? How much disruption for the refreshment business? And then on the flip side of that, if you can manage that, do you come out the other end with a more focused business that actually can. Can go to even greater heights than it has now?
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Exactly. I mean, they want. They want to be a Pure Play beverage company like Coke is. And I think they're doing exactly the right thing. There are right now two very different businesses. They've got the coffee pod coffee machine business and the refreshment beverage business. And I'm just not sure that's the best model. And I gathered they didn't think so either. So they're going to end up possibly after some disruption, Dwayne, with a Pure Play coffee company and a Pure Play refreshment beverage business. I think that as well as their beverage business has done in recent years, it's got a good chance of doing even better once the split has been executed and the interim disruption is behind them.
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Yeah. And I think one thing that's, you know, maybe not factored in is that some of the reason for this split could have to do with, you know, Jab being a major investor at one point point, and unwinding that over time and them recouping their investment and seeing some upside. I mean, it feels like the split at this time is sort of tied up in that as well. So you wonder, okay, is this the natural time to split it or is it, you know, somewhat not forced, but, you know, is the timing exactly where it would have been had you not had the jab factor and all this? So, you know, does that create a more difficult situation to manage or is this just sort of an evitability, you know, a practical way of thinking at this time, given the competitive environment? I think that's going to, you know, dictate a lot of how they manage the disruption. They have a great team. I mean, Tim Kofer, you know, you know, I think Wall street has a lot of faith in him, you know, of course, Bob Gamgort, who's, you know, I mean just a veteran of all these sorts of deals is there as well. So, you know, you feel like they have a good chance of getting through this and you know, maintaining that refreshment beverage business.
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Exactly.
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They've got a heck of a, you know, a CMO now who, you know, was at our conference, Drew Penny atu. You know, he's doing some really good things on the digital side. So I think there's a lot of reason to, to think they can, they can get that beverage side figured out.
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I agree with you. Also, Wall street always worries about disruption. I heard the word disruption 45,000 times when Coke decided to do the refranchising and there was some disruption. There's an old saying, life goes on during alterations, but it might not always be clean and easy. But they're a well managed company. They'll get through the split. My guess is they'll go through it pretty well. They've got lots of time to plan for it. And as I said, to repeat myself, I think that I don't know much about the coffee business. I never really followed that. But I think their refreshment beverage business, which has been doing pretty well, will do even better post split.
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One thing that KDP is doing as well that's been pretty interesting is as you know, last year they terminated the rights to the Dr. Pepper franchise for Coca Cola arrays in California, Nevada, some other states. That was pretty big news. Now that was very specific to the contract that they had with Rays. It was, you know, they, they gave them the ability to terminate without cause, which is extremely unusual in these kind of contracts. So I don't know how many conclusions you can draw about what they want to do with other KDP franchises. But you know, I put that question to Bob Callan at Admiral at our conference who they carry Dr. Pepper and he felt very comfortable that his franchise is safe. Other bottlers I've talked to seem to feel comfortable. They don't feel like KDP is going to come after their franchises. But you know, obviously it's created some consternation.
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I think, I think it has created some consternation. You know, I happened to talk around the holidays with an old friend who's a Coke bottler and this person's. And we're talking about KDP terminating Reyes Dr. Pepper franchise. And this bother said, you know, we're all watching that very carefully and you know, lots of bottlers have lots of different contracts. And I think that, I mean I have two thoughts on this. I think that Dr. Pepper is going to have a struggle in that Southern California market not being in the Koch system. The Koch system and the Pepsi system have such huge reach. And I think it's going to be a struggle for Dr. Pepper in that market. I also think I would not be surprised to see KDP, which I guess will become the Dr. Pepper Company, terminate or try to terminate at least a few other cola franchises in the next year or two. I think their calculus is that Dr. Pepper is so strong that in certain markets it can make their other brands much stronger. And that was probably their calculus in
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Southern California because they have scale there already.
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Right.
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I can't stress enough how the raise contract was not, was, was unusual in terms of that ability to terminate without cause. So that I think that's a real key factor there. But you know, the thought experiment, I mean, you know, some people have raised the question of at a time when, when people seem to be arguing for PepsiCo to refranchise its bottling business, you have KDP going the other way and, and, and bringing their franchise bottlers into a Kobo company owned situation which seems to be sort of, you know, does that. Why would they be taking such different approaches? But you know, Bob Callan from Admiral argued that, you know, those portfolios are very different. There's different dynamics about those portfolios in the particular businesses. So he believes it could entirely make sense for PepsiCo to refranchise and KDP to do what it's doing. But again, we have to stress, I mean KDP said they want to own, you know, more distribution in general, but they've also been, been pretty clear that, you know, where it makes sense, where they already have scale and they recognize too that the way the contracts are structured many times precludes even, you know, trying to do that. So I don't know that we need to get too exercised about it, but I do think it's something that people are watching really closely. And as you pointed out, it's something that has created a little bit of consternation here and there. And it's still an open question that we'll be watching pretty closely. This episode of the Breeze is brought to you by Ball Corporation, the leading provider of aluminum beverage packaging. As a longtime partner of the beverage industry, Ball helps brands of all sizes navigate change, manage challenges and unlock growth through reliable supply, strong relationships and purposeful innovation. From specialty sizes to advanced finishes and graphics, Ball works closely with customers to bring their brands to life and help them Stay ahead of evolving consumer demand. Learn more@ball.com Speaking of Bob Callan, an admiral from the conference, I also asked him would he want more Pepsi territory? And he said absolutely. So, you know, there's a few bottlers obviously who are you really stumping for territory. And of course he thinks that they should refranchise. So let's turn over to a whole nother issue. Obviously the regulatory environment last year was quite eventful. A lot going on, a lot of different issues. Kevin Keane, the CEO and president of American Beverage, the chief lobbying industry organization for Coke and Pepsi and Dr. Pepper and some of the men major beverage companies, was on stage with me and we talked through a number of issues going on. One of them is the SNAP program. And we're now up to, I believe, 18 states that eventually ban the purchase of carbonated soft drinks and some other drinks, like energy drinks, in some cases by SNAP recipients. So you can't use SNAP funds to purchase those. That all kicks in this year, those bands. Nick Modi was on stage and kind of evaluated what that looks like in some of the states. We'll be sharing that in the newsletter, you know, a lot there. But the industry is basically saying, okay, you know, they're doing it. We think, you know, people are still going to purchase these products. They'll just do it from one pocket instead of the other. They also point out that these are tests and they, the states have to come back and prove these are pilot projects and interest in essence. And they have to prove to the USDA that they actually accomplish the intended benefits to reduce obesity or you know, cut costs in SNAP spending, etc. They'll have to prove that and they think that's going to be a really tough sell. But you know, the question is, you know, how much the industry should needs to worry about that in the next year or so.
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Look, I think they'll lose some volume. I also find that, I personally find it highly offensive telling people who are recipients of the SNAP benefits they can't buy soft drinks. Soft drinks are either safe to consume or they're not safe to consume. And if they're safe to consume, everybody should be allowed to drink them, not just people who can afford them. And tell people who are getting SNAP benefits that they can't buy them. I think that is such a wrong headed position for the government or any government to take.
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Yeah, I mean it does have a very selective feel to it, you know, which the industry has dealt with for years now. It's sort of an easy one to look at and to target. So, but, you know, one of the interesting things about it is that, you know, the political forces that are pushing that now, the Maha, the make America healthy again, Secretary Kennedy, and you know, within the Trump administration are forces that typically have been allies of industry and industries like the soft drink industry. So it's been quite a sea change for the industry to figure out how to react to that. And honestly, what they've done is pretty interesting in that they've gone right to conservative media, they've gone to organizations like Breitbart, and they've taken the case directly to them to say, wait a minute, to your point, John, you don't want government stepping in and telling you what you can or cannot consume. These are big industries that are American industries that produce their products in Americas. And Kevin Keane pointed out, and these are the kinds of industries you actually want in the US With American jobs. And they've been taking the case directly to there. And you have seen, you have felt some kind of softening there. But again, these bans are being passed in some of these states, especially, you know, in conservative states, Republican led states with Republican governors mostly. So, you know, there's still a battle being waged. All right, John, let's turn to a couple of other categories now besides carbonated soft drinks. Real quick. Costa Coffee, that's, you know, Coca Cola said they want to sell Costa. They've been shopping it around. It's been a tough sell. You know, tough environment. Maybe, you know, as you've seen KDP splitting off its coffee business, tough environment for coffee. So far they've not been able to pull it off. Just. Do we think they're going to sell it this year?
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Yeah, I think they'll probably sell it. They won't get the price they want. You know, the CASA story is a sort of an unfortunate story. You know, I think Quincy, basically, he came in and he made a big deal out of Coke being the Total Beverage Company. And Starbucks was doing well. Pepsi had the joint venture with Starbucks and they bought Costa. And you know, I thought that was a good move back then. I know a lot of people disagreed with me, but you got to take risks and all risks don't pay off. And I don't think they quite figured out what to do with Costa, how to integrate Costa into their business. So now they're selling it, but, you know, that's life that happens. And yeah, they'll probably sell it. They won't get the price they want. And costs will be a chapter in Coke's history.
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B
I think people forget that the Costa deal was a supply chain deal for their global coffee business. And Covid just dropped a big bomb in the middle of that. It is what it is. To your point, I agree with we, you know, we used to get the criticism. Used to be companies like Coca Cola did not take enough risks. You know, they were too safe. And of course they take a risk and it doesn't work and you know, we want to beat them up. So I agree with you. You got to take some risks. Again, if you look at it through the lens of 2019, pre 2018, when that deal was done, it was a supply chain deal as much as anything. It wasn't a retail strategy, wasn't a retail deal. That was the engine for the broader supply chain. But, you know, there was more going on and you know, it just didn't work for various reasons. So we'll see what happens, whether they're able to to offload that now and move on. But speaking of supply chain, we've got Coke and Pepsi in the US have been slowly moving away from, you know, moving away from case pack water and large stores, moving it to the warehouse system from DSD, moving it into Niagara. You've got PepsiCo now moving bubbly into warehouse from DSD, you know, matching the Lacroix, the market leaders model. There's been some consternation in the bottling system about whether this is kind of a slippery slope for dsd. You know, these are products that are very commoditized. They don't, you know, these, these are the kind of products that don't have high margins, very low margins, but they do add, you know, add to scale to your trucks and, and help offset some of your operational costs for the higher margin products. So that's a loss for some bottlers. But do we think we're going to see more of this? I mean, are we going to see more moves of, you know, even more significant kinds of products to warehouse from DSD or even hybrids? I mean, I think you got to believe that there's a lot of thinking about that. Especially, you know, at PepsiCo for instance, primarily, you know, maybe KDP in some instances. I don't know, I just kind of wonder. I don't know that I really have a real clear view on that. But I just feel like there's probably going to be more and more of that sort of hybridization perhaps.
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A
I think water is somewhat unique. I think that there were a fair number of coal executives back in the late 1990s who were skeptical about going into water. I remember the CEO of Cadbury Schweppes, John Sunderland, said, we're not going to bottled water. It's a commodity business. And I think Coke and Pepsi can play in the premium water business with products like Smart Water. But I think that. I think that some of the skeptics back in the late 1990s in the industry about the wisdom of Coke and Pepsi going into the water business. I think some of those skeptics were right. It just was very hard to brand a product that you could get out of a tap. And it's. I think that. I think that basically Dasani and Awkwafina will be there. They'll probably continue to lose share. I think Smart Water will continue to be a success for Coke, but I just don't think that the case pack bottled water business was a business that Coke and Pepsi had enough time to develop and brand.
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B
Meanwhile, way back in the day, people always wondered whether energy drinks were a fad and whether that would ever continue. And we've seen that just, you know, that's been a juggernaut for, you know, 25 years. We had Rodney Sacks on stage at the conference. We awarded him our visionary award for everything he's done to help build that sector. He's very bullish on energy drinks. And you know, there's a lot of bullishness right now on Wall street and elsewhere about that category. After that blip last early last year or the year before that, it was concerning. It's just come back with a vengeance. Are we going to see more of that?
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A
I think energy drinks are remarkable. I remember I Beverage Digest had a conference in Dallas, Texas back in the maybe 1997, 1998 and maybe 1996. And we invited someone from Red Bull to come and speak and people just basically, their eyes glazed over. They just did not see energy drinks as being a potentially big business in the US market. And of course, everybody was wrong. I mean, energy drinks are a phenomenon. They're going to get bigger and bigger and bigger. In my view. The reasons are pretty clear why. And you know, I think that Coke has got Monster Pepsi now has got a good business with Celsius and Aulani Nuke. And these businesses have lots and lots of Runway in my view.
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B
You know, the other category that I think has been, you know, kind of on the opposite side in terms of, you know, trying to figure out what to do about it is sports drinks. And you know, I had a conversation with Ram Krishnan from PepsiCo on stage where we discuss sports drinks. And you know, they're the market leader, PepsiCo with Gatorade, and they believe that they need to get back to talking about the science and the efficacy of the product and basically reintroduce a new generation of people to why you would even drink sports drinks. And they believe that's a lot of the issue. I think that's. There's some debate about whether that's the extent to which that's going to return that category back to growth. Rapid hydration products are the ones, the electrolytes, the, the Gator lights, the body armor, flash IVs. Those are the part of the sports drink market that are growing and they do add additional functionality. So, you know, do you have. So I think what PepsiCo is saying is let's go back and make sure people understand the functionality and the science behind the core brands as well. And they think that could help uplift that brand. The core brands too, maybe additional messaging on the bottles. Powerades had some success talking about 50% more electrolytes and really pushing that functional value add. What do you think, John? Are we going to be able to see some sort of, you know, meaningful growth out of this category in the next couple of years?
- [36:59]
A
I think, I think PepsiCo is 100% right. I think that the reason sports drinks grew from that football stadium in Florida many years ago is because they were and are a functional beverage. And I think that if you try to market them as refreshment beverages, soft drinks, with maybe a hint of function, it's not going to work. And I think that basically Pepsi is absolutely right. Gatorade is a brand, which I think is a fantastic brand, a powerful brand, it should be growing and performing better. And I think if they can basically get back to convincing consumers that Gatorade really provides functional benefits and market that they'll see Gatorade return to growth. And I think if they do that, it'll probably pull Powerade along with it.
- [37:54]
B
I think that's a great place to end it. John, it's been fun as always running through the big stories of 2025 and casting forward to what it's all going to mean in 2020 26. And look forward to some more fun episodes this season.
- [38:07]
A
Good being with you, Duane. Take care and happy New Year again.
- [38:10]
B
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