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Coca-Cola Co. and PepsiCo Inc. have long been fierce rivals in the global battle for the hearts and minds of cola guzzlers. Now both are reeling from a growing aversion to sugar-laden soft drinks among the health-conscious, tough competition in fast-growing and more profitable segments of the beverage market, and assaults from activist investors determined to shake up the ancient heavyweights.

Their latest numbers show the extent of the damage.

Coca-Cola's profit nosedived 55 per cent in the fourth quarter to $770-million (U.S.) or 17 cents a share. Besides declining sales of soda pop in the U.S., Canada and other key developed markets, the company faced restructuring charges and took a bath on its Venezuelan operations. It also suffered hefty foreign-exchange losses stemming from a rising U.S. dollar, which clipped seven percentage points off operating income.

The decade-long trend of weaker pop sales – with and without sugar – puts even more pressure on a management and board scrambling to cut costs and strengthen footholds in more promising parts of the beverage market. These include water, tea, energy drinks, single-serve coffee pods and even a long-life milk product with half the sugar of regular milk and twice the price.

Coke expects more of the same mediocre results for 2015. Chief executive officer Muhtar Kent labels it a "transition year" of waiting for the benefits of the cost-cutting and asset-shrinking in what will continue to be a "volatile macroeconomic environment."

PepsiCo's profit also did a swan dive in the quarter, falling 24 per cent to $1.31-billion or 87 cents a share. Like its rival, Pepsi sold fewer carbonated soft drinks in North America and took a big currency hit. But unlike Coke, it has a profitable and expanding snack business to cushion the blow and keep investors interested. Analysts forecast that Pepsi's growth will continue to outstrip that of Coca-Cola over the next several years.

Activist investor Nelson Peltz had been pressing PepsiCo since 2013 to split itself into separate beverage and food companies, much the way an earlier industry target of his, Cadbury Schweppes, did with its Dr. Pepper Snapple group in 2008. But PepsiCo has brushed off his demands.

The two sides appeared to resolve their differences last month when Pepsi agreed to add William Johnson, an adviser to Mr. Peltz's investment firm and a former head of H.J. Heinz, to its board.

Not coincidentally, Pepsi announced Wednesday that it will spend up to $9-billion on share buybacks and dividends this year, which includes a dividend hike of 7.3 per cent, after returning nearly that amount to shareholders last year.

But while Mr. Peltz and his investing partners may be mollified for now, Coca-Cola's own activist bête-noir most assuredly isn't.

David Winters of Wintergreen Advisers has called for the withdrawal of bonus shares awarded to senior management and the removal of directors and top executives over a long list of missteps and miscalculations, including a failure to recognize the dramatic changes in consumer tastes.

"Protecting a secret formula from the 19th century doesn't seem to be enough to justify massive pay cheques and bonuses for senior executives," Mr. Winters wrote last month in an opinion piece for the Atlanta Business Chronicle.

"It's important that shareholders continue to keep the pressure on Coca-Cola to fix its problems and realize the huge value in this great brand," Wintergreen said in a statement Monday. "We think the pace of restructuring is still far too slow, management is not being held accountable and the board of directors appears content to sail along as if nothing is amiss. But change is coming to Coca-Cola, one way or another."

Until that happens, Pepsico seems a better play for investors. In the beverage steeplechase, they are both tied to stumbling former winners. But the Pepsi folks appear to be running a smarter stable.