In terms of model recognition, of all of the FTSE 100 shares, I reckon there’s one which stands head and shoulders above the remaining. Have you learnt of anybody who hasn’t heard of Coca-Cola HBC’s (LSE:CCH) eponymous beverage? I don’t.

Nonetheless, I’ve by no means understood why it stays so standard. For my part, PepsiCo‘s Pepsi is far better. Indeed, numerous blind taste tests have found it to be the preferred one, yet Coke remains the world’s best-selling mushy drink by miles.

Scientists have known as this the ‘Pepsi Paradox’. Though the vast majority of folks select Pepsi after they don’t know which of the 2 drinks they’re consuming, after they see the labels they typically choose Coca-Cola’s providing.

The folks in white coats have attributed this to the ability of branding and the persuasive influence of promoting.

In good firm

I’m undecided what first influenced Warren Buffett’s funding car, Berkshire Hathaway, to take a stake in The Coca-Cola Firm. However the world’s most well-known investor additionally prefers the drink (and the inventory). In his 1991 letter to shareholders, he described himself as a “happy consumer” of 5 cans a day of Cherry Coke.

At 31 December, the mushy drinks large was Berkshire Hathaway’s fourth-biggest fairness holding. Buffett’s firm doesn’t personal any shares in PepsiCo.

However the firm listed on the London Inventory Trade isn’t the identical because the one which’s standard with the American billionaire.

The Footsie model bottles and sells the well-known drink in 29 international locations throughout Europe, in addition to Egypt and Nigeria. The US-quoted inventory owns the worldwide rights and has a 21% shareholding within the Swiss-based firm.

The funding case

For my part, there are many causes to contemplate investing in Coca-Cola HBC. It stays the trade chief within the non-alcoholic ready-to-drink sector. And as a part of its technique of getting “a beverage for each consumer moment around the clock”, it has many manufacturers and various kinds of drinks in its portfolio.

Regardless of its dominance, the group claims there’s loads of room to develop, together with within the international locations the place it’s extra established, comparable to Italy and Greece.

As well as, it says it has a “relentless focus on cost and efficiency”, though I’d wish to suppose that every one the businesses I spend money on have the same strategy to value management.

To attempt to woo earnings traders, the group’s been steadily rising its dividend in recent times. We don’t but know what its payout (if any) will probably be for 2024. Nonetheless, for 2023, it was $0.93 a share. At present change charges that’s 71.67p, and implies a yield of two.1%. Nonetheless, it needs to be stated, that is nicely beneath the FTSE 100 common of three.6%.

Encouragingly, its share price has carried out nicely of late. Since March 2024, it’s risen 40%.

Remaining ideas

Nonetheless, I don’t wish to make investments. And on condition that the corporate seems to have a lot going for it, I settle for this would possibly sound like one other paradox.

However it’s not that I don’t fee Coca-Cola HBC extremely, I simply suppose there are higher alternatives elsewhere.

Attributable to intense competitors and altering tastes, I’m not satisfied there’s as a lot potential for progress as the corporate thinks. And its dividend isn’t excessive sufficient to get me excited.