PepsiCo says snacks, soft drinks could get pricier as demand remains strong
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PepsiCo Inc raised its full-year revenue forecast on Tuesday and said it could increase prices further in the coming months, with the beverage giant seeing little impact on demand for its sodas and snacks despite decades-high inflation.
The company’s shares rose 1.5% to $173 in morning trading.
Pandemic-induced disruptions to the global supply chain and surging raw material costs forced PepsiCo, like other packaged food makers, to increases prices for its products, and some retailers have pushed back against those hikes citing waning consumer demand.
However, PepsiCo Chief Financial Officer Hugh Johnston told Reuters the company had not seen any slowdown in demand in response to its price hikes, largely implemented late last year, and that there was room for prices to go further up.
“In a world where we’re seeing things like vegetable oil, grains and packaging prices increasing dramatically, I would be surprised if there wasn’t more (price increase) over the course of the next year,” Johnston said.
The company’s second-quarter net revenue rose 5.2% to $20.23 billion, beating estimates of $19.51 billion, according to IBES data from Refinitiv. It also beat profit estimates.
