PepsiCo Finds Consumers Shying Away From Snacks

PepsiCo, the parent company of popular brands such as Pepsi, Lay’s, Gatorade, and Tostitos, has noticed a significant shift in consumer behavior that has impacted its revenue, Patricia Battle reported for The Street.

During the quarter, the Frito-Lay division saw its sales volume (the number of units sold during a given period) in the U.S. decline by 3%. I Photo: Lay's Facebook

The company’s fourth-quarter earnings report for 2024 revealed that its net revenue declined by 0.2% year over year, as U.S. consumers reduced their purchases of snacks and beverages.

During the quarter, the Frito-Lay division saw its sales volume (the number of units sold during a given period) in the U.S. decline by 3% compared to the previous year.

Quaker Foods volume shrank by 6%, while PepsiCo beverage sales fell by 3%.

“In 2024, the salty and savory snack categories underperformed compared to the broader packaged food sector, following multiple years in which these categories had outperformed,” said PepsiCo CEO Ramon Laguarta and Chief Financial Officer Jamie Caulfield in a prepared statement.

The executives attributed the decline in demand to several factors, including “inflationary pressures and higher borrowing costs affecting consumer budgets” and the “continued growth in away-from-home dining.”

During an earnings call on Feb. 4, Laguarta acknowledged that a growing awareness of health and wellness among American consumers is also impacting sales, as more people seek healthier dietary options.