Keep Calm and Snack On

Results from PepsiCo and Conagra show Americans keep on snacking.

July 14, 2023

Leaders in the food and beverage industry, PepsiCo and Conagra Brands, have both reported strong numbers from their snack businesses.

PepsiCo’s organic sales rose 13% year over year, exceeding original estimates of 10% growth. The company also reported a 10.4% increase in revenue, reaching $22.3 billion in the last quarter, exceeding expectations by over $1 billion, according to the Wall Street Journal. A strong year brought sales growth in the Frito-Lay North America division to 14%, with volume increasing 1%, a strong contrast to PepsiCo’s 4.5% decline in sales volume in its North American beverages business. The packaged food business, which includes Quaker Oats and Rice-A-Roni, reported a 5% decline in sales volume.

“Though Pepsi earned more last quarter, the amount of products it sold went down. The prices of its products have risen by double-digit percentages for the past six quarters, and the company has reported dipping sales volumes for the past three quarters,” The New York Times reported.

Although Conagra, which owns Slim Jim and Orville Redenbacher among other brands, did not meet expectations for organic sales growth year over year (2.2% growth vs. 2.95% prediction), the grocery and snacks sector rose 3.6% versus a 2.8% forecast. “Conagra executives repeatedly singled out snacks as a growth driver,” the Wall Street Journal reported.

Industry leaders identify Americans’ busy schedules and changed post-pandemic routines as possible reasons for an increase in snacking in place of meals. Executives from Pepsi and Conagra said they are seeing more cautious consumer behavior in response to inflation, including seeking out deals, going to dollar and wholesale stores, and buying less in general, according to the Wall Street Journal.

The Wall Street Journal wrote that “[Pepsi’s] Chief Executive Ramon Laguarta said that although customers have been staying with the brands despite raising prices, lower-income shoppers have been looking for better deals.”

Learn more about industry-wide trends. The NACS State of the Industry Report® of 2022 Data is available now for purchase in digital and limited print.