PepsiCo net revenues jump 12.9% as acceleration into alcohol gathers momentum  

USA – American multinational food, snack, and beverage corporation PepsiCo is weathering the effects of the pandemic well with net revenues for 2021 surging 12.9% amid supply chain challenges.  

In a statement, the maker of Pepsi and Seven-Up soda brands noted that the double-digit growth gave it “added confidence” in its investments. 

Chairman and CEO, Ramon Laguarta, commented: “Our full-year net revenue growth meaningfully accelerated in 2021 versus the previous year. 

This gives us added confidence that the investments we’ve made in our people, brands, innovation, supply chain, go-to-market systems, and digitisation initiatives are working”. 

The Harrison, New York-headquartered company posted net sales of US$25.24 billion for Q4, which is a 12.4% increase on the prior year. 

The food and beverage giant’s net income for the fourth quarter came in at US$1.32 billion, down from US$1.85 billion last year.  

PepsiCo recorded organic revenue growth of 11.9% in the quarter, with its subsidiary Frito-Lay North America posting 13% organic revenue growth. 

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The Quaker Foods North America business saw its revenue increase by 9%, on an organic basis, compared with 1% in the previous quarter.  

The sector also saw its operating profit rise by 8%, reflecting “effective net pricing and productivity savings, partially offset by certain operating cost increases, including transportation costs”. 

Meanwhile, PepsiCo’s Asia Pacific, Australia, and New Zealand, and China region saw organic revenue growth of 13%, while operating profit decreased 25%. 

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According to Reuters, PepsiCo finance chief Hugh Johnston says that the company could potentially raise prices later this year if costs climb more than expected. 

But CEO Laguarta is confident that the investments the company has made previously give the business the “tools” it needs to “manage the price increases in better ways than we used to do it in the past”. 

Acceleration into alcohol space gathers momentum 

Meanwhile, 2021 saw PepsiCo further accelerate its diversification into the alcoholic beverages category. 

PepsiCo, Inc. has in place a partnership with the Boston Beer Co. to develop Hard Mtn Dew.  

Under the terms of its agreement with the Boston Beer Co., PepsiCo will be responsible for selling, delivering, and merchandising Hard Mtn Dew while the beer maker is responsible for developing and producing the beverage. 

Chairman and chief executive officer Ramon L. Laguarta said during the conference call to discuss fiscal 2021 results that he sees PepsiCo playing a larger role in the alcohol category. 

“We see that space as strategically, very incremental,” he said. “It’s sizable and it’s profitable. So, obviously, we’d like to participate in a consistent and structural way.” 

The incremental way is through partnerships like the one with Boston Beer which allows it to tap into the expertise of beer makers in developing high-quality alcoholic products and also their experience in navigating the highly regulated alcohol market.  

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