Wide-Moats Coca-Cola and PepsiCo Showcase Pricing Power Amid Inflationary Pressure; Shares Not Cheap

Concerns abound as it pertains to inflation and the ultimate consumer response, but we continue to believe wide-moats Coca-Cola and PepsiCo are well positioned to navigate the uncertain landscape. Our confidence in their durable competitive advantage stems from stout brand portfolios, which underpin strong pricing power and close retailer relationships, and from scale benefits due to the expansive global footprint each maintains. This pricing power has been evidenced this year as Coke and Pepsi have realized low-double-digit benefits from price/mix amid cost inflation and currency headwinds, but this has not impeded volumes, and we don’t see this ability to unearth gains in pricing and volumes faltering long-term.