Food and drink giant PepsiCo is seeing significant gains after lowering prices on its signature snacks and beverages earlier this year to lure back cost-conscious consumers.
In February, the company slashed prices by up to 15% on its signature snacks, including Lay’s and Doritos, as Americans tightened their budgets amid persistently high costs.
PepsiCo CEO Ramon Laguarta told FOX Business anchor Liz Claman Thursday the strategy helped consumers financially and helped drive the company’s first growth in more than a year.
“It was a holistic transformation of the business. Price was one element,” he said on “The Claman Countdown”. “We thought that consumers needed more value given the economic situations.”
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PepsiCo recently reported revenue growth of 8.5% and a profit rise of 27% since slashing prices.
“We increased consumption volume by 2% in our food business in North America, units 4%, almost 300 million new occasions in this first quarter,” Laguarta explained. “So, we’re very pleased with the overall transformation of the business.”
Laguarta revealed the food and beverage giant is addressing new consumer standards as Americans lean towards less-processed foods and learn the risks associated with artificial ingredients like food dyes, commonly found in PepsiCo snacks.
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The CEO said PepsiCo is “innovating” to meet evolving consumer preferences, cutting sugar in drinks like Gatorade, and removing artificial dyes from snacks like Cheetos.
“We’re very optimistic about where we’re going in that part of the business,” he said.
PepsiCo launched Cheetos Simply NKD late last year, offering consumers a color-free alternative to the popular snack. He said it maintains the same flavor without artificial additives and without increasing costs.
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Laguarta said such innovation has been “well received” by consumers, pledging that PepsiCo will continue to expand those efforts.
“We’re seeing moms with little children that they’re saying, ‘Okay, now I can give my children my favorites, and I’m feeling good about it.’ So, this is a platform that now we’re taking everywhere.”
Laguarta also addressed the “shrinkflation” as consumers grow frustrated with forking up more money for less product from food companies.
“We’re pleased with the execution of our pricing strategy, the fact that we’re giving consumers more value, especially in our multipacks and our multi-serve,” he told FOX Business.
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