PepsiCo still working to lure Americans back to snacks
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PepsiCo's results Tuesday showed that U.S. consumers are continuing to lay off the snacks.
Why it matters: Whether it's GLP-1s, more health-conscious consumers or stretched grocery budgets leaving less room for munchies — food companies are changing their playbooks to reinvigorate growth in North American snacking.
By the numbers: PepsiCo sold 1% more "convenient foods" products worldwide in the fourth quarter than it did last year.
- But in North America, volume in this category — which includes brands like Lay's, Doritos and Cheetos — actually declined.
- And that's an ongoing trend. Volumes for the company's Frito-Lay business have fallen in each of the last five quarters.
"In snacks, after five years of very fast growth and gaining almost 200 [basis points] of share, '24 has been a slowdown. Our #1 priority this year has been stabilizing the category, making sure that consumers come back to the category with good ROI investments," CEO Ramon Luis Laguarta said.
Zoom in: Laguarta downplayed the impact of weight-loss drugs directly on the company's U.S. snacks business, but cited a "higher level of awareness — in general — of American consumers towards health and wellness."
- To address it, the company is continuing to tinker with its offerings in the areas of portion control; lower sodium, fat and sugar contents; and the inclusion of plant-based proteins and whole grains.
Yes, but: The number one issue, the company says, is still budget.
- "When we talk to consumers, value is the number 1 decision-maker, and it's the reason why the category slowed down in the last 12 months," Laguarta said.
- "We think that addressing value given the consumers' choices at different price points, different solutions throughout the month — consumers will be making choices as they're trying to maximize their disposable income."
