'They don't know what they're doing': A seismic shift that set off the retail apocalypse could hit companies like Coca-Cola and Pepsi next

  • Coca-Cola and PepsiCo could be the next victims of the retail apocalypse as consumers increasingly shop online.
  • Up to 30% of beverage sales are impulse buys, according to one beverage industry analyst, and Coca-Cola and Pepsi target in-store shoppers.
  • “I think the discourse around e-commerce remains an antiquated discourse,” the analyst said, adding “On average, they don’t know what they’re doing.”

Beverage industry giants like Coca-Cola and PepsiCo could be in deep trouble as consumers ditch in-store shopping for e-commerce, analysts say.

Impulse buys make up roughly 30% of overall beverage sales, Ali Dibadj, an analyst at Bernstein, said at Beverage Digest’s Future Smarts conference in New York on Friday. As people increasingly shop online, those sales are in danger.

“That’s something that’s not being addressed right now,” Dibadj said.

Without customers grabbing a Diet Coke while checking out at Walmart or a two-litre bottle of Pepsi at the grocery store, the beverage industry could be in trouble. As sales of soft drinks by volume have dropped for 12 consecutive years in the US, companies like Coca-Cola and PepsiCo do not want to risk losing an opportunity to get their products in customers’ hands.

“I don’t think most beverage companies are particularly well prepared” for the rise of e-commerce, Caroline Levy, a senior analyst at Macquarie Capital, said Friday.

Dibadj added: “I think the discourse around e-commerce remains an antiquated discourse … On average, they don’t know what they’re doing.”

Coca-Cola and PepsiCo have contested the idea that they’re ignorant of the rise of e-commerce.

Both companies mentioned e-commerce sales in their presentations at the conference on Friday. Coca-Cola, specifically, says it has been investigating click-and-collect grocery sales, bundled deals (such as meal kits), and new impulse “triggers” online.

Still, considering the apocalyptic effect that customers’ shopping online has had on brick-and-mortar retailers and industries, including food and beverage companies the impact of e-commerce cannot be underestimated.

Speaking about the industry’s “seismic shift” toward digital and mobile, Starbucks CEO Kevin Johnson told investors earlier this year that “retailers who are agile and reimagine the art of the possible will be big industry winners.”

“Those who do not will struggle mightily,” he added.

With a huge chunk of their business at stake, Coca-Cola and PepsiCo can’t afford to fall behind – or have an industry rival beat them to the punch.

“Until the day we have instantaneous cold beverages delivered to our home while we’re sitting at our computer, e-commerce challenges impulse,” Dibadj said.

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