PepsiCo said on Thursday (9) it will not raise prices of its sodas and snacks further after multiple rounds of price hikes last year helped the beverage giant to post fourth-quarter profit and revenue ahead of analysts’ estimates.
The giant saw organic revenue growth of 14 per cent as full year revenues rose to £71 billion. This reflected growth in all geographies, driven mainly by higher sales prices.
A near duopoly in the carbonated drinks market with Coca-Cola Co helped PepsiCo raise prices with little pushback from consumers as it battles higher freight and commodity costs, as well as the impact of a stronger dollar on international revenue.
“We have most of our price increases for the year already in place,” PepsiCo Chief Financial Officer Hugh Johnston told Reuters.
While the company expects inflationary pressures to persist this year, it still sees consumer demand being resilient. Looking to 2023, the group’s expecting organic revenue growth of 6 per cent.
PepsiCo is in a “real sweet spot” in terms of consumers since they have enough money to buy themselves affordable treats, Johnston said.
The slowdown in pricing should ultimately be offset by better volumes and demand for non-alcoholic beverage products are going to remain strong, Wedbush Securities analyst Gerald Pascarelli said.
The company’s North America beverages unit, which houses brands such as Mirinda, 7UP and Gatorade, posted an organic revenue growth of 10 per cent in the fourth quarter. Average prices jumped 16 per cent, while organic volume slipped 2 per cent.
The Frito-Lay maker however, forecast annual profit below estimates and said it expects some pushback on prices in the second half of the year.
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