PepsiCo saw its net revenues rise by 4.3% in the first quarter of the year to $12.56 billion thanks to the performance of its snack and beverage brands in developing markets.
However, the company – which owns brands such as Mountain Dew, Tropicana and AMP Energy – saw sales in its North America beverage unit fall by 1% as consumers shift towards healthier drinks.
The North America beverage business is the company’s largest and it recorded reductions in revenues of at least 3% in the previous two quarters.
In a bid to retain sales, the company has since released a low-calorie variant of its Mtn Dew Kickstart line and a range of calorie-free fizzy waters called Bubly.
PepsiCo CEO Indra Nooyi
PepsiCo is now relying on growth from its snack categories and earlier this year its Naked Juice brand revealed it would release its first range of chilled snack bars, the first products the brand has produced outside the premium juice and smoothie sector.
In its Latin America unit, net revenues surged 14% to $1.2 billion and in Asia, Middle East and North Africa revenues increased 7% to $1.04 billion.
PepsiCo CEO Indra Nooyi said: “Although we continued to face challenges in North America beverages, the sector had sequential improvement in top line momentum since the fourth quarter of 2017.
“We continued investing in and growing share in a number of faster-growing, future-facing categories. However, competitively we recognise the need to step up investments in core carbonated soft drinks, which we intend to responsibly do.
“We believe our plans will drive further improvement as the year progresses. Importantly, we remain on track to achieve the financial targets we set out at the beginning of the year.”
The company said it expects full-year organic revenue growth to be at least in line with the 2017 growth rate of 2.3%.
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