Snacks Driving Growth for PepsiCo

PepsiCo CEO says snacks will soon account for two-thirds of the company’s overall revenue.

February 18, 2014

MONTPELIER, FRANCE – Snacks outperformed beverages for PepsiCo last year, a shift that company CEO Indra Nooyi said would drive a revised corporate focus, Bakery and Snacks reports.

In 2013, snack volume increased 3% while beverages dropped 1%. Nooyi commented on the numbers during a recent call to analysts, remarking that snacks would outpace beverages in future growth and generate two-thirds of the company’s overall revenue. “As a result, over time, our business mix will gradually shift to be more heavily weighted towards snacks,” she said.

Nooyi also said PepsiCo would focus on emerging markets, including China, Pakistan, Saudi Arabia, Brazil, Mexico and Turkey. "These markets have a long run rate for growth, driven by increasing demand for our convenient, on-trend, affordable products supported by rapidly growing middle class. The investments that we’ve made in these markets place us in an advantaged position," she said.

Nooyi emphasized that despite the disparity in strength between sales of snacks and beverages, PepsiCo would not split the categories into separate businesses. “Decoupling our beverage and snack business in North America would significantly reduce our relevance to our customers,” she said, adding sales for each complement one another. “Our entire portfolio is focused on taste and convenience. Our products are purchased together and consumed together. Our presence in beverages supports our snacks growth.”

Advertisement
Advertisement
Advertisement