just On Call - North America a work in progress for PepsiCo
PepsiCo reported a slight increase in North America beverages volumes in Q3
The CEO of PepsiCo has said that the company has more work to do in its North America beverages division, despite a small rise in volumes in the region during the firm's latest quarter.
Speaking on the company's third-quarter earnings call today (12 October), PepsiCo's chairman & CEO, Indra Nooyi, said that North America's beverage market continues to be a "competitive and tough environment". She added that, while there are "no quick fixes", PepsiCo is "intensely working" at driving growth in the region.
Earlier today, the company reported a slight volume increase in North America beverages, with a 3% rise in net sales for the division in the three-month period. The lift came on the back of pricing actions taken in the quarter across much of the portfolio.
In June, the company raised its prices by 5% to 7% on a year earlier, in a bid to offset rising raw material costs.
PepsiCo's CFO, Hugh Johnston, told analysts today that CSDs in particular are an important focus for the company in North America going forward.
"We have got to be competitive and in doing that we have to balance commodity costs, the consumer and competition," Johnston said. "Those are the three pieces. In doing that, we also need to make sure that our brands are sharply defined and our innovation is strong."
Johnston conceded that the North America beverage category is a challenging one, but added that innovation continues to drive growth.
"We have innovated from a flavours perspective, from a branding perspective to create interesting positioning and from a sweetener perspective, which we do think is a meaningful one," Johnston said. "First around stevia, and then relationships with flavour enhancer companies. In terms of CSDs ... the key to being successful is making sure our pricing is competitive, innovation is sharp and that we differentiate our products from the competition."
Johnston said that the company would detail a 'gameplan for 2012 and a view on commodities going into 2012 during an investor call in December.
PepsiCo's share price registered a 2.2% lift today, to US$62.28 at 1012 ET.
Click play, below, to view the thoughts of PepsiCo's CEO, Indra Nooyi, on the company's structural changes announced earlier today (12 March)....
A change in legislation in California this month has put The Coca-Cola Co and PepsiCo in a soft drink pickle. Ray Rowlands, for one, fears a case of history repeating itself....
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