PepsiCo is betting on a new 13-oz PET bottle priced below $2 to reach consumers who are walking past the cold vault to better afford higher prices for gas and groceries. The company is rolling out the smaller bottle across five of its biggest sparkling brands. We dive deep in a Q&A with PepsiCo's US Sparkling Chief JP Bittencourt.

Rising fuel and aluminum prices against the uncertainty of a war in Iran and the highest annual inflation rate since May 2023 have caused increasing angst among US beverage bottlers and distributors. BD informally surveyed executives across the Coca-Cola, PepsiCo, Keurig Dr Pepper, and independent beverage distribution systems during the past week to find out what cost and profit margin pressures they face now, and what additional pressure they expect. The bottlers also discussed concerns about the revenue side of their P&Ls as consumers look for ways to better afford high grocery and gas prices. During the first-quarter earnings cycle in recent weeks, Coke, PepsiCo, Keurig Dr Pepper, Celsius Holdings, and Monster Beverage all addressed current and anticipated commodity inflation pressure this year, while adding that the costs are mostly manageable so far. “We expect beverage companies will feel margin pressure in 2026, with likely pricing actions in 2027,” RBC Capital Markets Beverage Analyst Nik Modi wrote in a May 7 research note, citing higher costs for aluminum and fuel. Much of the pressure is falling on distributors who own and fuel the trucks that move beverages and buy the aluminum cans that drinks are packaged in. One bottler called it a “perfect storm” of cost pressures. The following is a summary of responses and key themes that emerged from more than a dozen discussions:

ABOUT THIS REPORT AND BD’S FACT BOOK, 31ST EDITION. This report is a snapshot of BD’s newly-published Fact Book, 31st Edition. Fact Book offers a comprehensive view of US liquid refreshment beverage industry sales performance by brands, company, and category. Annually, BD compiles estimated volume and value sales data for the US liquid refreshment beverages (LRB) market, as well as categories including carbonated soft drinks (CSD), and energy drinks. The data included in BD’s Fact Book and in this special issue synopsis estimates beverage sales for all measured and unmeasured channels, including packaged retail, fountain, and vending. The fountain channel includes restaurants, sports and entertainment venues, and other foodservice outlets. In recent years, BD has added chilled juice to the annual Fact Book and to this report. Table 1 does not include an “all other” category and therefore market shares do not sum to 100.

Coca-Cola bottlers in the US are broadly optimistic about incoming Coca-Cola CEO Henrique Braun, expressing confidence that his ground-level understanding of local markets and emphasis on consumer and digital...

PepsiCo announced last month an initiative with German tech conglomerate Siemens and computer chip maker NVIDIA to create “digital twins” of manufacturing plants and warehouses. The goal is to use AI-backed digital simulation technology to figure out what physical changes to plants and warehouses would best improve speed, quality, and efficiency. According to Siemens, the technology tested in one US Gatorade plant increased throughput by +20% within three months. PepsiCo estimates it could reduce capital expenditures by -10% to -15% by “uncovering hidden capacity and validating investments in a virtual environment” before construction. “This allows the company to optimize existing assets rather than investing in costly new construction,” Siemens said in a blog post about the PepsiCo partnership. BD wanted to understand how digital twins work, so we turned to Niraj Jha, who is the senior director of logistics at Niagara Bottling. His work is focused on how data, automation, and AI are reshaping beverage supply chains. Jha’s team leads large-scale optimization initiatives across Niagara’s national network. Jha has been an outspoken proponent of AI technology in manufacturing and distribution. The following interview has been condensed and edited for clarity: