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Dive Brief:

  • After withdrawing its 2020 guidance in April, PepsiCo issued new financial guidance for the year on Thursday, projecting 4% organic revenue growth. “The consumer trends in mobility and behavior around away-from-home versus in-home are stable enough” to predict how the company will fare through 2020, PepsiCo CFO Hugh Johnston told the Wall Street Journal.
  • As consumers kept supermarkets busy and maintained a hunger for snack foods and beverages, PepsiCo’s revenue jumped 5.3% in the third quarter, the company shared Thursday, a bounceback from its 7% decline in Q2. Restaurant and office sales stayed low, but convenience store, gas station and supermarket revenue grew, the company said. 
  • “We have pretty good visibility into the next quarter,” Johnston told CNBC. “We really do feel like we have a good line of sight. New consumer behaviors have gotten really stable. We feel like we can give investors a reasonable level of confidence in what we expect to deliver.”

Dive Insight:

PepsiCo has been immune to many inventory-related issues plaguing competitors, as the company brings the products to stores itself. 

One of the corporation’s most popular snack foods, Cheetos Mac ‘n’ Cheese, has been “flying off the shelves,” Johnston told Yahoo Finance. “We literally can’t make enough. Every box we make we sell almost immediately.

In 2021, the company also plans to expand its energy drink portfolio, particularly with regards to innovation within Rockstar and Bang-branded energy drinks, both of which the company has recently acquired. 

Asked whether PepsiCo was considering launching a hard seltzer or CBD-infused beverage offering like main competitor Coca-Cola, Johnston demurred. 

“As a company, we look at every growth opportunity, [and] evaluate them on their merits,” he said. “Currently, we’re staying more mainstream.”

Despite Frito-Lay and Quaker Brands revenue both jumping 6%, and beverages improving 3% against an expectation of around 1% growth, Johnston does not believe the boost stems from panic buying or extra time at home.

“Candidly, what we see in the snacking and beverage business is consumers have returned to big brands in pretty substantive ways, and are finding they really like the products and quality, and as a result, they’re leaning into our portfolio,” Johnston told CNBC.

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