PepsiCo is cutting snack prices across the US, with consumers “feeling the strain”
Snacks accounted for 85% of Pepsi’s North American profits last year. Does PepsiCo need a name change?
Inflation-weary snack fans who struggle to resist picking up a pack of Lay’s, Doritos, or Flamin’ Hot Cheetos might find the next walk down the aisles marginally less painful, after PepsiCo announced it would be cutting prices across a range of its snacks on Tuesday.
The snack and beverage behemoth has been inundated with email and phone complaints about rising snack prices from cash-strapped consumers of late, per exclusive reporting from The Wall Street Journal. If retailers follow PepsiCo’s price cut recommendations, US customers could see lower prices on shelves starting this week, according to the company, which topped Q4 estimates yesterday.
Though the business’s execs said rising snack prices have come alongside broader inflation and soaring production costs, there’s no escaping the fact that food products have ballooned into the most lucrative part of the North American Pepsi business by some stretch.
In recent years, the revenue split between the PepsiCo Foods North America division — previously separated as the Frito-Lay and Quaker Foods segments — and its Beverages North America division has gotten a little closer, with an almost exact 50-50 split seen in each of the last four years. Growing more disparate, however, is the share of profit between the two: last year, the Foods division posted $6.2 billion worth of operating profit on $27.5 billion in sales, while Beverages returned just $1.1 billion on $28.2 billion worth of revenues.
