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Consumers driving shift to smaller pack sizes - PepsiCo CEO

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The head of PepsiCo has noticed a "fundamental change" in demand among North American consumers for smaller beverage bottles and cans in the soda category.

Ramon Laguarta said PepsiCo is investing in capacity for smaller beverage formats

Ramon Laguarta said PepsiCo is investing in capacity for smaller beverage formats

Speaking to analysts after PepsiCo's third-quarter results last week, CEO Ramon Laguarta said the shift is allowing carbonated soft drinks in developed markets to grow sales in value terms in the face of falling volumes. Smaller formats have higher per-litre prices and improve category mix.

In Q3 results, PepsiCo's North American beverage unit posted a sales increase despite lower volumes. The trend was also on show in the first two quarters of the year.

Soft drinks producers including The Coca-Cola Co and PepsiCo have increasingly moved to smaller pack sizes in recent years to improve margins. However, Laguarta said the shift is now being driven by consumer demand.

"I think there is a fundamental change in demand for consumers going for smaller packs," he said. "That's driving a change in the price per litre of the category and price per unit."

Laguarta said PepsiCo is investing in capacity for smaller formats in North America, a move that will add to the company's expenditure. But, he said the soft drinks maker is getting a return on that investment through higher pricing.

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