Pepsi realizes it flew too close to the sun on price hikes

You can’t raise prices forever, Pepsi has learned.

For the last couple years, Pepsi and its peers raised prices on snacks, allowing them to grow profits even when consumers were buying fewer cans of soda and bags of chips by volume. But it's starting to bite them back.

It raised prices by 5% in this most recent quarter, marking the second quarter in a row that it only raised prices by single-digit percentages. In the same period in 2023, it raised prices by 15%. 

The snack giant reported a 2% drop in sales volume in its most recent quarter, which outweighed its 1% increase in revenue. In the same period in 2023, it reported a 2.5% decrease in volume but a 10.4% increase in revenue. 

Pepsi chief executive Ramon Laguarta, said the consumer is now more “price conscious” and looking for deals.

“The consumer is more cautious, the consumer is more choiceful, but the consumer is willing to spend in areas where they see value,” Laguarta said.