PepsiCo says focusing more on ‘guilt-free beverages’, less on carbonates

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PepsiCo, the giant soft drinks maker known for its Pepsi-cola brand, among others, said it “was aggressively moving towards products with fewer calories” in a bid to transform its product portfolio. It added that it was reducing reliance on carbonates and focusing more on what it calls ‘guilt-free’ beverages.

‘Guilt-free’ beverages are drinks that are below 70 calories per 12 oz serving, according to the company.

The CEO of PepsiCo Indra Nooyi, said that guilt-free products now account for approximately 45% of the company’s portfolio by revenue.

She adds that “We are future proofing our product portfolio by responding to the increased appetite for health and wellness. ‘Everyday’ nutrition products that include grains, fruit and vegetables, plus those that are naturally nutritious like unsweetened tea and water currently make up 20% of our revenue portfolio.

“The growth of our everyday nutrition products is outpacing the balance of the portfolio. We have undertaken significant activity to transform our portfolio and broaden it so we’re less reliant on colas. Globally, just 12% of our revenues come from trade mark Pepsi,” she said.

The Company saw a high demand for its ‘Naked cold-pressed fruit juices’ and Lipton RTD teas in the first quarter outside North America, growing 60% and 10% respectively.

PepsiCo said it was increasing investments in research and developments, and marketing. According to Nooyi, marketing accounted for 6.3% of sales in 2015.

The company reported net revenues of $11.86bn in the first quarter of 2016, which ended on April 19th. In the same period last year, the company recorded $12.2bn, a 3% drop.

Ms. Nooyi told analysts not to be discouraged by the highly volatile international market.

“Based on the innovation pipeline, based on the execution capability of our businesses and knowing what we’ve sold into customers around the world at this point, we feel optimistic about our revenue guidance for the year.”

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