Analysis

just On Call - PepsiCo CEO surprised by "accelerated" diet soda drop

Most popular

What's coming up in soft drinks in 2020?

What's coming up in dark spirits in 2020?

What will shape consumer trends in 2020?

Will 2020 see Campari Group back on the M&A hunt?

just-drinks speaks to DISCUS CEO Chris Swonger

MORE

PepsiCo CEO Indra Nooyi has admitted that a slowdown in US diet soda sales has been more rapid than expected.

//i4.aroq.com/1/pepsico.jpg

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.

To access all just-drinks articles on PepsiCo's Q3 & YTD results, click here.


Sectors: Company results, Soft drinks, Water

Companies: PepsiCo

Related Content

PepsiCo pledges soda spend as North America Beverages sales suffer Q1 dip - results

PepsiCo pledges soda spend as North America Beverages sales suffer Q1 dip - results...

PepsiCo CEO lays ground for North America cola war as Pepsi loses out to Coca-Cola

PepsiCo CEO lays ground for North America cola war as Pepsi loses out to Coca-Cola...

PepsiCo takes control of SodaStream International in US$3.2bn deal

PepsiCo takes control of SodaStream International in US$3.2bn deal...

Indra Nooyi leaves PepsiCo in good shape, but what lies ahead for Ramon Laguarta? - Comment

Indra Nooyi leaves PepsiCo in good shape, but what lies ahead for Ramon Laguarta? - Comment...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?