Advertise with

Beverage sales rise as new packaging strategy helps company attract more consumers.
Beverage sales rise as new packaging strategy helps company attract more consumers.

PepsiCo's decision to sell smaller cans pays off


By Nivedita Balu - Jul 10th, 08:19

Beverage sales rise as new packaging strategy helps company attract more consumers. 

PepsiCo’s quarterly revenue and profit beat Wall Street estimates, boosted by higher sales of its traditional Pepsi as well as snacks Lays and Doritos chips.

Beverage sales rose in the quarter as the company’s move from large cans to smaller ones helps it add consumers who occasionally like to “indulge” even while preferring healthier options.

“Core Pepsi is what is driving the improved performance in soda,” said CFO Hugh Johnston.

“You have the consumer shifting from bigger volume packages into packages that are smaller … but the price realisation is quite good on them,” Johnston said.

Earlier in 2019, PepsiCo launched berry, lime and mango-flavoured sodas in 12-ounce cans and introduced variations of Cheetos and Doritos tortilla chips.

Rival Coca-Cola Co also saw a rise in overall sales in its past quarter, boosted by strong demand for its orange-vanilla cola, its first such launch since 2007 when it introduced vanilla Coke.

Pepsi and Coca Cola have also been trying to offer new products to cater to consumers who prefer healthier options like sparkling waters and teas.

Beverage volume fell 2% at PepsiCo’s North America beverage unit, due largely to higher sales of smaller packages of sodas and juices, but revenue from the business rose 2.5%.

Revenue in its snacking division, Frito-Lay North America, rose 4.5%, led by high single-digit growth in convenience and dollar stores, pushing total net revenue up 2.2% to $16.45bn.

Organic revenue, which excludes the effect of currency fluctuations and acquisitions, rose 4.5% in the quarter. Three analysts polled by Refinitiv IBES had expected a 4.87%.

Net income attributable to the company rose 11.8% to $2.04bn from $1.82bn a year earlier.

Excluding one-time items, it earned $1.54 per share. Analysts had on average expected profit of $1.50 per share and revenue of $16.43bn.

Shares of the Purchase, New York-based company, which have risen 20% so far in 2019, were up marginally in early morning trade. Business Live 

Read more about: strategy | sales | retail | pepsico | packaging | business

Related News

Ackermans launches ‘Moms4Moms’ educational platform to give mothers a helping hand
16/09/2019 - 14:03
According to a 2017 Statistic South Africa report, 61% of South African children are raised by only their mothers. This reveals that the majority of South African women have to navigate single-parenthood, as well as being the sole provider for their families.

Rhodes Food Group's turnover rises amid healthy international growth
16/09/2019 - 11:14
The international turnover of Rhodes Food Group, which makes Bull Brand corned meat and Bisto gravies, rose 13.4% in the 10 months to end-July, boosted by a weaker rand and exports of fruit snacks to the US.

The changing UX and CX landscape
13/09/2019 - 16:16
An exceptional customer experience (CX) builds a foundation of loyalty and trust. Similarly, a positive user experience (UX) encourages brand connections with people wanting to come back for more. And yet, local organisations must learn to embrace these more effectively to differentiate themselves from their competitors.

The role of the stokvel in the organisation
13/09/2019 - 10:14
South Africans are well-known for their participation in stokvel saving schemes where members contribute a fixed monthly amount that is paid out to a specific member on a specified date. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, says employers can integrate these payments into existing processes to make it safer and more convenient for those members.

Improving your restaurant's ambience with these 5 tips
13/09/2019 - 09:44
Owning a restaurant is much more than ensuring that your guests are well-fed. It is about the experience you offer your customers. For instance, have you ever been to a restaurant where everything is just right? And by everything, we mean the decor, lighting, food, and music. This is the first impression you should aim to achieve as a restaurant owner.