Pepsi Wins With Big Name Snacks

Investments in marketing and customer insights pay off.

October 18, 2019

PLANO, Texas—PepsiCo’s net revenue increased more than 4% in the third quarter, and much of the credit goes to big name snack brands, Quaker products and smaller premium brands, according to Bakery and Snacks. The company reported a 4.3% increase in organic net revenue. In emerging markets, including India, Saudi Arabia, Turkey and China, that number was 7%. 

Smaller premium brands, such as Bare Snacks and Off the Eaten Path, contributed to those results, according to Ramon Luis Laguarta, CEO of PepsiCo. “Investments we’ve made in innovation, marketing and consumer insights, manufacturing and go-to-market capacity are providing benefits across the portfolio,” he said.

In North America, PepsiCo increased marketing spend for Quaker Foods, a segment that saw a 1% boost during the quarter. Overall, the company increased its marketing investment overall by 12% and partnered with other organizations to help reach the desired audiences. Cheetos partnered with KFC for a Cheetos-laden chicken sandwich, and PepsiCo launched a logo-less Doritos campaign. Fritos teamed up with a veterans’ group to promote special July 4 packages.

PepsiCo is relying on precise data analytics “to achieve precision at scale, which is to execute in every store with precisely the right products at the right price,” said Laguarta. Rather than seeing customers as millions of different groups, PepsiCo is using data to understand purchasing decisions at the household level.

Going forward, the company plans to offer more snacks with lower sodium and less saturated fat, as well as beverages lower in sugar. Artificial ingredients are being removed from Quaker products, and both snacks and drinks will be produced in smaller sizes.