Pepsi Cola and Lay’s Chips are Getting More Expensive

In the coming period, products such as Pepsi cola, Lay’s chips and Quaker breakfast cereals will increase in price.

 

Snack, soft drink and other food manufacturer PepsiCo said in a statement to its quarterly earnings that raising prices will be the “main” means of offsetting higher raw material, transportation and supply chain costs.

PepsiCo will change the mix of products it sells to get still buyers interested in buying snacks, chips and other goods. This concerns, for example, different packaging of Lay’s chips instead of just large bags. It also wants to examine per region how the space on the shelves can be made more efficient. All this to boost profit margins, said financial director Hugh Johnston of the American company. “In local grocers, sales per square foot can go up,” he said.

Despite the pricing and delivery issues, PepsiCo expects sales to grow faster than previously anticipated in the current fiscal year, aided by the reopening of hospitality and events such as concerts and sports competitions. However, Johnston said the company’s beverage operations were particularly hampered by shortages of certain supplies, such as aluminium cans for soft drinks and plastic bottles for Gatorade sports drinks.

Sales, excluding currency effects, acquisitions and divestments, are expected to rise 8 percent this broken fiscal year. Previously, a growth of 6 percent was expected. In the past third quarter, that so-called organic turnover increased by 9 percent compared to a year earlier. With the figures for the second quarter, the forecasts for the full year have already been revised upwards.

Total turnover from the sale of, for example, Pepsi cola, Lay’s chips, Doritos pretzels and Quaker cereals climbed by almost 12 percent to 20.2 billion dollars. However, the net profit was $2.2 billion, slightly lower than a year earlier due to higher costs.