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Higher prices, more healthy snacks stimulate PepsiCo profit



PepsiCo Incís profit in the second quarter exceeded forecasts.



11.Jul.17 3:07 PM
By Daria Zaytseva
Photo Toinnov.com

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Higher prices, more healthy snacks stimulate PepsiCo profit

The company sold more higher-margin healthier foods such as baked chips and raised prices on its drinks in North America.

Revenue from North American businesses of Frito-Lay company, in which it sells snacks such as Lay's chips, increased by 3% in the quarter ended June 17. Sales volumes increased 1% and net prices rose 3%.

The demand for snacks was caused by the launch of premium products such as Poppables from Lay's chips, which have a relatively less sugar content. Poppables also costs more: the package of 5-ounces sells for $ 2.48 in Walmart.com compared to a 10-ounce a bag of chips, Lay's Classic that sells for $ 2.50.

PepsiCo isn't the only company promoting foods perceived as healthier than its traditional products.

Rival Coca-Cola Co and other companies such as Nestle SA and General Mills Inc., reduced the sugar in their snacks and beverages to satisfy consumers who avoid unhealthy foods and are willing to pay more for healthier options.

Shares of PepsiCo, however, fell almost 1% to $113.19, which corresponds to synchronism with the broader market.

The company said Tuesday that sales of beverages in North America rose 2% in the quarter. Although, sales volume were flat, net price increased by 1%.

Revenue rose 2.1% to $15.71 billion, beating the $15.60 billion expected by analysts.




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