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PepsiCo's snack revenue outpaces beverages in Q3

Pepsi Co has reported that its net third-quarter revenue is up 1.3% to US$16.24bn, failing to meet analysts estimations of US$16.31bn. Beverage sales s...

Laura Mullan
|Oct 5|magazine6 min read

Pepsi Co has reported that its net third-quarter revenue is up 1.3% to US$16.24bn, failing to meet analysts estimations of US$16.31bn.

Beverage sales slumped with a 3.4% decrease however, this was partially offset by a 3.4% rise in snack sales to $5.3bn. 

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The drinks giant blamed low beverage sales on declining store traffic, a colder summer and increased spending on smaller, low-calorie brands, at the expense of their Pepsi and Mountain Dew trademarks. 

The slump marks the first quarterly sales drop in beverages in two years, 

“Overall, our businesses performed well in the third quarter in what continues to be a challenging environment,” said Chairman and CEO Indra Nooyi 

“Each of our operating sectors delivered results in line with or ahead of our expectations, with the exception of North America Beverages (NAB), where revenues declined following two consecutive years of very strong third-quarter growth. 

“This summer, we directed too much of our media spending and shelf space to low-calorie, much smaller brands at the expense of our Pepsi and Mountain Dew trademarks.”

For more than a decade the fizzy drinks market has been slowing as consumers seek healthier options and governments across the globe crackdown on sugar content. 

Beverage manufacturers have responded to this trend by putting out smaller fizzy drink containers, a higher-per ounce prices, which has helped to fill the gap. 

However, as the popularity of bottled water has risen to become America’s most popular beverage, soda companies have to innovate to diversify in order to keep sales slipping.  

PepsiCo said it makes nearly half of total revenues from “guilt-free” products, such as diet sodas.