PepsiCo To Launch Alcoholic Beverages in Russia, Salty Watermelon Pepsi in Japan

PepsiCo (NYSE:PEP) may soon launch alcohol drinks including cider, sbiten and mead in Russia after it told the country’s trademark authority that it plans to start production sometime soon. ^[1] The company’s biggest rival Coca-Cola Co (NYSE:KO) already distributes alcohol in the country, including Jack Daniels whiskey and Finlandia vodka. In another news, the company plans to launch a new flavor Salty Watermelon Pepsi in Japan, keeping up with its past tradition of launching new drinks aimed at capitalizing the summer demand.

We maintain a price estimate of $69 for PepsiCo, which is in line with the current market price.

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PepsiCo’s First Alcohol Venture

This is the first time that PepsiCo will produce an alcoholic beverage in its history. PepsiCo already produces kvass, a fermented beverage made from black or regular rye bread, in the country under the brand name Russky Dar. Now, it plans to extend the brand to include three other alcoholic drinks: cider, sbiten and mead. Sbiten is a traditional Russian alcohol drink, whereas mead is an alcoholic beverage produced by fermenting a solution of honey and water.

PepsiCo has stepped up its focus on Russia in recent years. In December 2010, it acquired the country’s Wimm-Bill-Dann for $3.8 billion to foray into the dairy market.

Salty Watermelon Pepsi To Debut in Japan

PepsiCo plans to launch a new flavor Salty Watermelon Pepsi for its flagship drink on July 24. And although the flavor might seem weird by Western standard, the concept is not new in Japan. Previously, the company had even launched Cucumber Pepsi and herb Shisho Pepsi in the country, though they were not well-received. It remains to be seen whether this drink can make a lasting impression on Japanese consumers as the beverage has already created quite a buzz before its launch. ^[2]

Understand How a Company’s Products Impact its Stock Price at Trefis

1. PepsiCo Eyes Alcoholic Beverage Production, themoscowtimes.com, May 27, 2012 [↩]
2. Salty Watermelon Pepsi Set to be Sold in Japan in July, news.gather.com, May 29, 2012 [↩]