In the years between 1975 and 1993, the Coca Cola Company posted an average return
on equity of 30.5%. Similarly, PepsiCo Inc. recorded an average return on equity of
21.2%. Although these figures likely include the return form non-soft drink operations
(it's difficult to tell from the available information in the Yoffee and Foley case), it is
clear that the soft drink industry is extremely profitable--profitable, that is, for
concentrate producers such as Coke and Pepsi.
For other members of the soft drink supply chain, the soft drink industry is not nearly as
attractive.…
