PepsiCo remains optimistic about its future, banking on a wave of innovative products to reinvigorate consumer interest. The company announced on Thursday that it is launching new offerings, such as protein-infused Starbucks coffee, low-sugar Gatorade, and all-natural Doritos, to counter declining demand. This move comes as PepsiCo grapples with shifting consumer preferences, which have impacted its North American food business, leading to a 3% revenue drop in the third quarter. However, CEO Ramon Laguarta emphasized the company’s swift action to phase out underperforming products and reinvest in healthier, more natural alternatives. A new line of Doritos and Cheetos, branded as “NKD,” will feature no artificial flavors or colors, while Tostitos and Lay’s chips without artificial dyes are set to hit U.S. shelves soon. Laguarta highlighted the urgency of innovation to capture growing market segments. On the beverage front, PepsiCo has already seen success with Pepsi Zero Sugar, which experienced double-digit revenue growth, and Mountain Dew, boosted by new flavors like Summer Freeze and Dragon Fruit. North American beverage revenue rose 2% in the same quarter. Despite a 11% decline in net income to $2.6 billion, adjusted earnings of $2.29 per share exceeded analysts’ expectations. PepsiCo’s shares climbed nearly 3% in afternoon trading. The company also faces pressure from activist investor Elliott Investment Management, which holds a $4 billion stake and has urged PepsiCo to streamline its portfolio and refranchise its North American bottlers. Laguarta described discussions with Elliott as constructive, with both parties agreeing on PepsiCo’s undervaluation. He also hinted at potential refranchising and emphasized the importance of adapting to future demands, including increased online sales and warehouse efficiency. In a leadership update, PepsiCo appointed Walmart executive Steve Schmitt as its new CFO, replacing Jamie Caulfield, who will retire after over 30 years with the company.
PepsiCo, fresh off a strong third quarter, says new products will soon boost customer demand
