ORLANDO, FLA. — PepsiCo, Inc. plans to evolve its portfolio to add more value, manufacture healthier options, and create more availability for consumers to purchase its products throughout the day in a strategy outlined by the company at this year’s CAGNY Conference.
“We’re a great sales company, but we’re trying to also refresh our iconic offerings and working hard at sodium reduction, fat reduction,” said Ramon Laguarta, chief executive officer and chairman of the board, PepsiCo. “We’re working hard at the removal of artificials so that we give consumers the same great experience, now better. Just an example, I don’t know if you saw our Super Bowl commercial with Lays. We’re trying to anchor Lays in what it is: real potatoes that are grown and consumers can have simple pleasures in a very authentic way. Now those Lays have 20% less sodium than they had two years ago, and consumers are accepting that very well.”
The company also is incorporating alternative cooking methods like baking and popping for potato products to reduce oil usage. Laguarta also mentioned Frito Lay’s Simply line of snacks is relaunching this year, which takes core brands like Doritos and Cheetos, and adds functional and natural ingredients like whole grains for additional fiber, uses cheese, and eliminates artificial colors and flavors.
“Refreshing our iconics with great taste and better-for-you ingredients is core to our strategy,” he said. “We continue to evolve not only our core offerings, but we continue to offer consumers new offerings that keep consumers in the category, increase the frequency of consumption of our categories.”
Convenience and customization
He said one way to keep consumers coming back to PepsiCo products is through price pack architecture for cost value and convenience, which is another area the company is focused on in 2025.
“The multipack business in the US is already a $4.5 billion dollar business,” Laguarta said. “Five years ago, it was less than a billion dollars. We see consumers adopting multipacks and small portions as the go-to solution to have our categories throughout the day. At the same time, we’re providing consumers with different alternatives like mini-canisters and mini-beverages that also help consumers with convenience and portion control. This will be a driver for us long term from the price point, from the combination, and from enabling the consumer to create their own multipacks through direct-to-consumer options.”
Laguarta added that direct-to-consumer customization is “a big strategic lever for us, and we now have the capability to automate multipacks to have endless combinations of multipacks, and that will be a solution for the future. The same with small canisters and large canisters.”
Also on the topic of customization is the company’s Gatorade and Propel brands, which Laguarta said are well positioned for growth in the functional hydration category.
“We have invested in an infrastructure for powders and mixing that allows us to create much more complex solutions in sachets and tablets, and we’re going to invest massively behind that business,” he said. “It is now a billion-dollar business in the US, our Gatorade and Propel powders, and this will be a driver of growth for us. We can provide much more functionality in every sachet.”
Away-from-home concepts
Laguarta said the company also is evolving its culinary and away-from-home options that incorporate PepsiCo products, opening additional occasions for consumers to interact and eat those foods outside of snack occasions.
“We’ve talked a few times how we’re thinking about our brands participating in meals throughout the day, and we’ve been inspiring consumers around the world to use our products in meal locations,” he said.
Some examples Laguarta mentioned were Lays chips being added to rice bowls in Asia; potato omelets in southern Europe that incorporate Lays at the company’s La Tortilleria locations; Tostitos Tostianguis carts in Mexico, where consumers can build their own Tostitos-based meals; Doritos Loaded food trucks at US universities; and the new Drips, which is a mobile, walk-up beverage concept where Pepsi products can be mixed with other ingredients for customized drinks.
“You can see how we’re evolving and participating in meals, but also giving consumers the opportunity to buy more elevated experiences of our products throughout the day,” Laguarta said.
PepsiCo’s operating profit declined in all three North American business units — FLNA (Frito Lay North America), Quaker Foods North America and PepsiCo Beverages North America — in the year ended Dec. 28, 2024. The company’s net income of $9.58 billion, equal to $6.95 per share on the common stock, was up 6% from $9.07 billion, or $6.56 per share, in the previous fiscal year.