USA – Food and Beverage giant, PespiCo Inc posted a 4.3% growth in organic revenues during the third quarter ended September 2019 boosted by strong marketing initiatives.
Net income during the third quarter, however, slipped by 16% to US$2.1 billion, or $1.49 per share, down from US$2.5 billion, posted in a comparative period a year earlier.
Sales of the Frito Lay and Gatorade Zero brands owner climbed 4.3% to US$17.19 billion, topping expectations of US$16.93 billion. The company’s strategy for sales growth includes investing more on marketing and advertising its products.
Frito Lay North America, which includes brands like Cheetos and Doritos, saw revenue growth of 5.5% in addition to a 3.5% growth in revenue for its North American beverage business.
Gatorade also improved its market share and saw positive net revenue growth during the quarter. The brand’s no-sugar line, Gatorade Zero, which launched in May 2018, surpassed a half-billion dollars in retail sales.
Bubly, which the company expects will be one of its next billion dollar brands, is continuing to gain market share in the flavored sparkling water category against competitors like La Croix.
Based on the results, the food and beverage giant now expects to meet or exceed its 4% target for organic revenue growth in 2019.
“Given our performance year-to-date, we now expect to meet or exceed our full-year organic revenue growth target of 4%,” CEO Ramon Laguarta said in a statement.
The company in July reported an upbeat quarter, beating on both the top and bottom lines, on the back of strong demand for healthier snacks and sparkling water, which drove revenue growth.
The company reported Q2 adjusted earnings per share of US$1.54, while revenue grew to US$16.44 billion, benefiting from a 2.2% rise in organic revenue.
Pepsi has been putting efforts to improve its competitive position against rival Coca-Cola and Dr Pepper Snapple Group.
However, changing consumer health trends, particularly with declining soda consumption and new taxes on sugar-sweetened beverages, has pressured its beverage business.
PepsiCo has now increased its focus on higher-growth beverage categories, releasing new drinks such as Bubly and energy drinks like Mountain Dew Game Fuel.
The company has also been expanding its snack lineup with healthier options, through brands like Bare and Off the Eaten Path.