- Coca-Cola
- eyeing a deal with a marijuana producer
- Pepsi
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Legalized weed could be the boost beverage giants like Coke and Pepsi need as Americans ditch sugary sodas (KO)
With rumblings that Coca-Cola is eyeing a deal with a marijuana producer, legalized weed could be a boost beverage giants need. If CBD-infused beverages go mainstream, then they could be a way for Coca-Cola and Pepsi to boost sales as drinkers continue to ditch soda.
Americans are drinking less Coke.
With the report that Coca-Cola could be eyeing a deal with marijuana producer Aurora Cannabis, it seems legalized weed could be the boost beverage giants are looking for.
Americans have been consuming less soda in recent years as sugary drinks are increasingly demonized.
In 2006, soda sales by volume declined in the United States for the first time in 20 years. Every year since then, the decline has continued, with Coke and Pepsi brands falling 2% and 4.5%, respectively, by volume in the US in 2017, according to Beverage Digest.
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As a result, beverage giants have been forced to diversify outside of soda.
Under the leadership of Indra Nooyi, PepsiCo has spent the last 12 years expanding into the snack and wellness space. less than 25% of PepsiCo's sales were from soda,German dairycompany Theo Muller Grouplower-calorie soft drink Izze.
Now, the next step could be investing in legal marijuana.
As Business Insider's Jeremy Berke reports, legal marijuana is on track to become as big — or bigger — than the soda industry.
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"The question is: Is it going to be something akin to energy drinks — a new category that is trendy at first, that actually grows into a meaningful long-term business? Or is it going to be sort of a fad?" Duane Stanford, the executive editor of industry publication Beverage Digest, told Business Insider.
If CBD-infused beverages are more than a fad, then they could be a way to boost sales as people continue to ditch soda. So, analysts say that Coca-Cola and PepsiCo are very likely to at least consider making deals with marijuana producers.
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