Food Innovation Online Corp

You are here

What can Pepsico's Q2 results tell us on the savory snacks market?

What can Pepsico's Q2 results tell us on the savory snacks market?

Some of the products highlighted by Indra Nooyi during the PEP - Q2 2016 PepsiCo Inc Earnings Call as examples of Innovation: Simply Tostitos Black Bean chips, SunChips Veggie Harvest Farmhouse Ranch and Smartfood Delights sea-salted caramel-flavored popcorn.

July 11, 2016
Last week Pepsico released its results of Q2 2016.

PotatoPro had a closer look and hunted specifically for trends in the (global) savory snacks market.

The Q2 2016 highlights for Pepsico as a whole:

Pepsico results for the second quarter of 2016. Read more...

Chairman and CEO Indra Nooyi:

“In what continues to be an incredibly volatile global macro environment, we are pleased with our results for the second quarter.”

“While reported net revenue performance was negatively impacted by foreign exchange translation and the deconsolidation of our Venezuelan operations, we delivered balanced volume growth and positive price/mix driven by relentless execution of our commercial agenda and leading to solid organic revenue growth.”

“At the same time, our focus on driving greater efficiency throughout our operations contributed significantly to attractive margin expansion while we continued to invest in our business.”

“Based on our year-to-date performance, we are raising our full-year core constant currency EPS growth objective.”

Specifics on Frito-Lay North America

The Second Quarter Results for Frito-Lay North America (FLNA) were Positively affected by productivity gains and lower raw material costs, partially offset by impacts of operating cost inflation and higher advertising and marketing expense.

Reported volume growth for Frito-Lay North America for Q2 is 2%, while revenue growth is 4% (Organic % Change) resp. 3% (GAAP Reported % Change)

More specific from Indra Nooyi during the Q2 2016 PepsiCo Inc Earnings Call:

"Turning to Frito-Lay, we continue to expand our portfolio with a particular focus on premium offerings and healthy snacking options."

"So for example, we've expanded our Simply line with the introduction of Simply Tostitos Black Bean chips made from real black beans. It's non-GMO project verified and Simply Tostitos Black Bean chips offer consumers an excellent source of fiber with 5 grams per 1 ounce serving."

"And this Simply line has also introduced Simply Tostitos organic chunky medium salsa and Simply Tostitos organic black bean and corn mild salsa, and both salsa varieties are USDA-certified organic."

"SunChips has introduced Veggie Harvest farmhouse ranch flavored veggie and whole grain and Veggie Harvest tomato, basil and cheese flavored veggie and whole grain, and both are made with real veggies and whole grains."

"And Smartfood has introduced Smartfood Delights sea-salted caramel-flavored popcorn, which offers 50% less fat when compared to regular Smartfood white cheddar popcorn. It offers 100% whole grains and 35 calories per cup."

"So as a result of initiatives like this year-to-date, our Frito-Lay US premium portfolio growth is outpacing the growth in the balance of the portfolio by a factor of more than 4 times, and we are extending our value shared leadership position in premium salty snacks. So that's innovation."

The rest of the world

For the Pepsico Operations outside of North America, results are not specified in detail for the different sectors. However, Pepsico does provide a split between snacks/food on one side and beverages on the other side for Organic Volume % Growth:

  • Latin America: 2% (Organic Volume % Growth)
  • Europe + Sub-Saharan Africa (ESSA): 3% (Organic Volume % Growth)
  • Asia, Middle East and North Africa (AMENA): 4% (Organic Volume % Growth)
Companies in this Article
Frito-Lay North America (FLNA) includes Pepsico's snack operations in the United States and Canada where the company dominates the market with a range of savory snacks brands including Lay's, Ruffles, Doritos, Tostitos, Fritos, Cheetos and Sunchips
PepsiCo is one of the world's leading food and beverage companies with over $65 billion in net revenue in 2012 and a global portfolio of brands, including several savory snack brands.