You know things are getting bad when Pepsi Cola shuts down six bottling plants.
Tap water is making a comeback. That’s bad news for PepsiCo’s profits.
The company, which makes Pepsi, Doritos and Quaker Oats cereal, announced on Tuesday that its quarterly earnings were down 10 percent in part because of declines in sales of soda and bottled water in the United States. In response, the company is planning to eliminate 3,300 jobs and close as many as six plants to cut costs and to refocus its efforts on stabilizing its domestic beverage business.
Financial analysts have moved Coke and Pepsi into the category of “Consumer Staples”, meaning like, Milk they are not subject to recessionary downturns. Well, it turns out that people can go back to drinking tap water instead of bottled tap water and brown sugar water. I think we may find a lot more items that are “discretionary” rather than “staple” in the near future.