just On Call - PepsiCo CEO surprised by "accelerated" diet soda drop
PepsiCo expects to launch new sweeteners next year
PepsiCo CEO Indra Nooyi has admitted that a slowdown in US diet soda sales has been more rapid than expected.
In a call with analysts today (16 October), Nooyi said there has been “an accelerated decline” in diet CSDs in the past six to nine months, as US consumers turn against artificial sweeteners. And, the PepsiCo head said upcoming sweetener innovations are not guaranteed to halt the drop in demand.
“Will our innovations stop the decline? That's anyone's guess,” Nooyi said. “But, we have to keep betting on innovation. In today's world, the best insulation against volatility is to have a diversified portfolio and not be overly dependent on a category like CSDs. In North America, CSDs are not a gigantic driver of our profits so we feel pretty good about where we stand today.”
According to Nielsen figures, unit sales of the overall diet and low-calorie soft drink category in the US fell by 6.9% for the four-week period to 3 August, versus the same period last year.
To help combat this - and long-term overall CSD declines - Nooyi announced this year that PepsiCo is developing new sweeteners and flavourings that could “alter the trajectory of the cola business”.
Today, Nooyi said the innovations are still expected to appear next year but no launch date has been set. “Once we have a launch date you'll hear more about it,” she said.
Meanwhile, PepsiCo CFO Hugh Johnston said the company will reduce investment in its bottled water brands.
“We're not willing to invest money just to hold share,” Johnston said. “We'll continue to sell packaged water, but it's not a priority for us from an investment perspective.”
The CFO said the decreased focus will damage overall volumes in PepsiCo's non-carbonated beverage category. “What it won't do, though, is significantly impact our profitability,” he added.
Johnston and Nooyi were speaking after the release of PepsiCo's year-to-date results, which saw group profits rise but a drop in North American beverage volumes drag overall performance.
In 2012, Cía de Bebidas Pepsico continued to adapt to the gloomy economic climate by holding back prices, offering its core carbonates brands at lower retail prices than its main competitor Cía Servic...
We're just over two months away from the start of the biggest sporting event on earth: The FIFA World Cup kicks off on 12 June, when host country Brazil take on Croatia in the first match of the month...
PepsiCo India is one of the largest players in packaged foods and soft drinks in India. The holding became the new title sponsor of the Indian Premier League (IPL) for five seasons starting from 2013....
PepsiCo Deutschland GmbH is the second biggest player in carbonates in Germany. The company offers a wide product portfolio within carbonates, covering cola and non-cola carbonates through well-known ...
- Comment - Diageo Steps Up Defence of Haig Club
- Focus - Diageo's H1 Results by Region, Brand
- Comment - Spirits - Where Next for Scotch Whisky?
- just the Preview - Diageo Q2 & H1
- US spirits pricing went "a little high" - Diageo
- Belvedere vodka tie-up over new James Bond film
- Diageo speaks out over supplier contract changes
- ASA rejects Haig Club ad complaints
- Brown-Forman appoints Jack Daniel's president
- Diageo H1 sales flatline as Q2 improves
- Global RTD/RTS insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Edrington Group in Spirits (World)
- Global Consumer Trends and Key Consumer Targets in Alcoholic Beverages
- Global vodka insights - market forecasts, product innovation and consumer trends research