PepsiCo says it is ‘smartly’ prioritising healthier products and ecommerce

Pepsi says its “positive” first quarter results have been delivered by reacting to changing consumer trends such as a drive for healthier products as well as improving its ecommerce offering.

PepsiCo

PepsiCo is increasing its focus on ecommerce and sustainability, as the company’s CEO says it “isn’t just necessary, but smart business”.

The company revealed its Q1 results today (26 April), which show that total sales were up 1.6% in the first quarter of this year, while organic revenues grew 2.1% for the same time period.

Speaking on an investor call, the company’s CEO Indra Nooyi says its “strong performance” has been enabled by Pepsi’s ability to forecast societal shifts and changing consumer needs.

“It has been clear to us for more than a decade, that if we want our future to be as bright as our past, we need to transform our company in a number of ways,” she said.

This includes reacting to consumers adopting healthier lifestyles; a trend that has led PepsiCo to produce more “nutritious” products. It is also placing a bigger focus on sustainability, which Nooyi says is “not just necessary but is smart business”. Approximately a third of its production plants currently have near zero waste.

“We are looking to meet the evolving needs of consumers around the world. We have guilt-free products, which includes beverages 72 calories or less and snacks with low levels of sodium and saturated fat. Some 35% of our net revenue is from guilt-free products – these [brands] are growing faster than the overall portfolio,” she explained.

Nooyi says PepsiCo is also building a “powerhouse” ecommerce team on a global scale, with a particular focus on the US, China and the UK.

It is consequently looking to tailor its digital efforts to individual retailers “to fit their growth strategy”. When asked if the business is struggling to capture consumers making impulse purchases online for its products, Nooyi insists this concern could be reframed as an opportunity.

She concluded: “In terms of the difficulty around impulse buying in an online environment, we’ve built a good ecommerce business. I can’t discuss the exact [growth] rates but it’s impressive. Our challenge as a business is to make an impact online, so we are working with partners to make [our brands] look like impulse categories.”

Perhaps unsurprisingly, Nooyi didn’t use the investor call to discuss the recent controversy surrounding Pepsi’s tone-deaf Kendall Jenner protest ad.

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