Whatās Going On Here?PepsiCo reported better-than-expected earnings on Tuesday, as the US food and drinks giant starts to cater to slightly moreā¦ expensive tastes. What Does This Mean?Supply shortages have been pushing up costs for companies across the board, but Pepsiās in a stronger position than most: it sells products that customers tend to buy no matter what, which means it can bump up prices without sacrificing sales. And thatās exactly what happened last quarter: Pepsiās profit fell 3% compared to the same time last year, sure, but its organic revenue ā that is, excluding the effects of acquisitions and currency swings ā grew 9%. Emboldened, the company said itās planning to raise prices even more in an effort to close that profit gap, and its raised its revenue outlook for the rest of the year too. Why Should I Care?For markets: Green is the new brown.
Pepsiās stock is only up 4% this year versus the US stock marketās 16%, but the company has a plan to fix that: itās been trying to endear itself to an increasingly eco-conscious customer and investor base (tweet this). That became clear last month, when it said itād be releasing a new range of healthy snacks and drinks in collaboration with Beyond Meat by 2022. It then doubled down on those new sustainable stylings, announcing that it would be committing to a new program ā āPep+ā ā that includes a raft of ambitious sustainability targets.
Zooming out: Beerās lost its taste.
Itās not just Pepsi thatās looking to change with the times: AB InBev ā the worldās biggest brewer ā said on Monday that itās thinking of selling off some of the German beer brands itās owned for decades. It apparently wants to focus more on wines and spirits, which stands to reason: more than 60% of growth in the alcohol industry is being driven by products other than beer. | 