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“When it ain’t broke, don’t fix it, ” was never the motto of an ardent activist investor. Take Nelson Peltz who has been nudging PepsiCo to split up its fizzy beverage and snack business. But the two seem to go well together, like peanut butter and chocolate in a Reese’s cup. After all, fizzy drinks may make one want one of Pepsi’s Frito lay salty products. And salty snacks could make someone want…a fizzy drink.
Nelson Peltz, who owns a significant stake in PepsiCo, should take a lesson from Coca-Cola, which is lacking a snack segment, and has been suffering losses from the decline in the popularity of cola. After earnings, Coke fell 6%, after its management reported disappointing sales and lowered the outlook. Insiders say, according to the New York Post, that the flagging fortunes of Coke might cause Peltz to put less pressure on Pepsi to split up. It isn’t that Pepsi has been delivering stellar numbers; its performance if flat. But at least it isn’t stumbling as much as its largest competitor.
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