Pepsi Brings Coca-Cola Freestyle Rival - Analyst Blog

PepsiCo, Inc. PEP recently unveiled its new digital soda dispenser, Spire which is expected to directly compete with The Coca-Cola Company's KO Freestyle fountain machines, available since 2009.

As per media reports, Spire, which was revealed at a National Restaurant Association show resembles Apple, Inc.'s AAPL tablet or iPhone. Spire allows customers to make up to 1,000 personalized carbonated beverages by selecting their favorite Pepsi brands, including Pepsi, Mountain Dew, Sierra Mist, Brisk Iced Tea and SoBe Lifewater, using a touch screen.

Spire is now available in select U.S. locations but is expected to be rolled out across the country and globally soon.

As Pepsi and Coca-Cola face declining sales of their traditional soft drinks the beverage giants have been launching innovative products to better compete with each other. In order to re-vitalize cola sales which are suffering due to their high calorie content, Pepsi is testing versions of the product containing evolutionary natural sweeteners. The company also expects to launch lower calorie, naturally sweetened non-cola products in the U.S. this year. On the other hand, Coca-Cola is offering more beverage choices in the form of different package sizes, sweeteners and beverages, including more low- and no-calorie selections.

In February this year, Coca-Cola entered into an innovative partnership with Keurig Green Mountain, Inc. GMCR under which the latter will exclusively make Coca-Cola branded pods to be used on its upcoming Keurig Cold at-home beverage system that will make cold beverages. The deal opens up an exciting new packaging format for Coca-Cola brands. Soon after, there were rumors of a possible takeover of Israel-based manufacturer of household soda machines, SodaStream International, by Coca-Cola's rival Pepsi.

Both Pepsi and Coca-Cola carry a Zacks Rank #3 (Hold).