PepsiCo faces escalating snacking troubles with additional volume drops

PepsiCo’s troubles with its snacks business continue to escalate as the company faces volume declines for the fifth consecutive quarter. The fiscal year 2024 saw a further slump in PepsiCo’s snack business, with Frito-Lay North America experiencing a 3% volume decline in Q4 compared to the previous year. This trend continued throughout the year, with an overall 2.5% volume decrease compared to fiscal 2023.

In an effort to address this issue, PepsiCo’s CEO and Chairman, Ramon Laguarta, outlined the company’s strategy to revive its North American business. Laguarta emphasized the importance of consumer-centric initiatives, highlighting plans to refresh product lines, relaunch brands with new packaging and flavors, and expand the multicultural product portfolio. Additionally, the company aims to prioritize convenience and value by offering portion-controlled options and making strategic investments to provide good value across different channels.

To further enhance its snack business, PepsiCo implemented a three-pronged approach for 2025. This approach includes a focus on consumer-centricity, convenience and value, and expanding PepsiCo’s presence in social dining moments. The company plans to leverage its productivity initiatives to manage operating costs, engage with consumers, and maximize its direct store delivery system.

In an attempt to boost its snacking business, PepsiCo made strategic acquisitions at the end of 2024. The acquisition of Siete Foods for $1.2 billion and the purchase of the remaining stake in hummus brands Sabra and Obela aim to strengthen PepsiCo’s better-for-you portfolio and cater to consumers in away-from-home channels. These acquisitions align with PepsiCo’s goal of offering healthier snack options and meal solutions to meet evolving consumer preferences.

Despite these efforts, PepsiCo’s stock experienced a 4.5% drop following the earnings announcement, as investors remained cautious about the company’s turnaround plan. However, PepsiCo remains committed to revitalizing its snack business by focusing on innovation, consumer engagement, and strategic acquisitions to drive growth and meet the changing demands of the market.