PepsiCo's unique reliance on Irish-produced soda concentrate for its U.S. drinks has resulted in a significant negative impact on its projected earnings. The imposition of a 10% tariff on this concentrate has led the company to revise its earnings forecast for the year, now expecting no increase.
Unlike its main competitor, Coca-Cola, PepsiCo manufactures the concentrate for nearly all of its U.S. sodas in Ireland. This difference in manufacturing location exposes PepsiCo to greater vulnerability to tariff increases.
Both PepsiCo and Coca-Cola face potential challenges from a 25% tariff on aluminum imports, which could further impact their profitability.