PepsiCo's Snacks Division Becoming More Important to Company’s Overall Growth

Published By : 01 Sep 2015 | Published By : QYRESEARCH

Contrasting common perception that the beverages division of PepsiCo, one of the world’s largest food and beverages companies, must be the one bringing in more than half of the company’s annual revenues, the snacks division has lately become the one shouldering more responsibility than the beverages division of the company.

The foods division of the company, which comprises divisions like as Quaker Foods and Frito-Lay, had a share of 53% revenues generated by the company in the last financial year. While the food division of the company observed growth at a 3.5% CAGR over the past three year period, the sales of the beverages division saw a decline of 3.2% over the same period.

The beverages segment of the company comprising juices and carbonated soft drinks seems to have fallen out of its previous glory and its popularity amongst customers has started fading out over the past few years owing to the high content of sugar and other preservatives in these drinks.

Juices and carbonated soft drinks of together form nearly half of the net volume of the liquid refreshment beverages market of the US, and with the continuously declining demands for these drinks, PepsiCo’s drinks such as Tropicana, Pepsi, Mountain Dew, and Diet Pepsi have seen decline in sales.

At the same time, even if health concerns have led to declining demands for carbonated soft drinks and other beverages in most developed markets of the company, snacks, which feature high levels of salt and cholesterol, continue to enjoy a solid share of customers. Case in point is the rapidly expanding North America division of Frito-Lay.

After observing a 3% growth in the previous year, PepsiCo’s Frito-Lay division of North America announced a revenue growth of 2.5% in the first half of this year, with a  2% growth in company’s organic volume. 
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