With the current pandemic, PepsiCo has admitted their need to improve ecommerce, based on the number of people working from home and doing their shopping online.
PepsiCo CEO Ramon Laguarta told investors recently, “The penetration of ecommerce or e-grocery just accelerated by three years. It’s happening now.” PepsiCo recently showed an increase of sales, after experiencing a 7% decline from the previous quarter. Their growth shows to be coming from snack sales.
Where is PepsiCo Investing Their Resources?
They have clearly stated they are interested in investing in the current increased digital sales market, calling it a “booming market”, as their current forecast is being overshadowed by digital demand. They are currently experiencing demand which surpasses their expected results of even a few years from now, with their CEO stating their models have been accelerated by 3 years.
One of the areas PepsiCo is investing in, will be their omni-channel solutions, based on the growing number of online shoppers and e-grocery making a large impact. Improving their current capabilities will allow them to be competitive long term.
PepsiCo is also implementing direct to consumer digital presence, which will allow their dedicated consumers the ability to buy direct, rather than only through 3rd party retailers. Pantryshop.com and snacks.com were launched earlier this year, in an effort to provide this direct solution.
With the beverage side of PepsiCo growing 3% in North America for their 3rd quarter ending September 5th, snacks have risen 7%, which can be contributed to consumers eating out less, and working from home. Organic sales are a direct reflection in the change of consumerism, which shows digital sales and ecommerce to be the focus for most major consumer brands.
What Are PepsiCo’s Growth Areas?
Some of the growth areas for PepsiCo include Walkers crisps, Tostitos, and their Quaker Oats products, based on the snack industry showing to be a major growth area moving forward.
Laguarta added, “Despite the ongoing volatility and complexity in our operating environment, I believe our third quarter performances reinforces the diversification of our portfolio, the resilience and agility of our teams across every continent and demonstrates our ability to support our customers and communities during their time of need while also delivering good results for our shareholders.”
Under their current earnings outlook, PepsiCo expects it’s annual revenue growth to be around 4%, showing their growth model for the first time since COVID lockdowns negatively impacted their sales back in April 2020.
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