Tag: Pepsico Inc.

PepsiCo Sales Grow Again Thanks to Weak Dollar. But There’s More to Worry About
PepsiCo Inc. (NASDAQ: PEP) shares climbed Thursday after the global food and beverage giant reported better-than-expected quarterly earnings, fueled in part by favorable currency movements. However, despite the upbeat report and a slight upward revision to its full-year outlook, analysts and investors are eyeing deeper concerns that could cloud the company’s future growth trajectory.
For the second quarter of 2025, PepsiCo reported revenue of $22.4 billion, up 4.1% year-over-year, and adjusted earnings per share (EPS) of $2.18, beating the Wall Street consensus estimate of $2.09. The company credited a combination of strong international demand for its snack brands and a weaker U.S. dollar, which boosted overseas sales when converted back to dollars.
“The continued strength of our international markets, coupled with productivity initiatives and pricing discipline, helped us deliver another quarter of solid performance,” said PepsiCo CEO Ramon Laguarta in a statement.
The dollar’s recent softness—down nearly 3.4% against a basket of major currencies since April—played a significant role in lifting PepsiCo’s earnings, as more than 40% of its revenue comes from international operations.
Shares of PepsiCo rose 2.8% Thursday, closing at $184.67, marking the stock’s best single-day gain since March.
Full-Year Outlook Tweaked, but Not Significantly
PepsiCo modestly raised its full-year EPS guidance to a range of $8.15 to $8.25, up from the previous forecast of $8.10 to $8.20. The company also reaffirmed its revenue growth target of 4% to 6% on an organic basis.
Still, executives struck a cautious tone on consumer spending and rising input costs.
“We continue to see some softness in North American consumer purchasing behavior, particularly in value channels,” said CFO Hugh Johnston during Thursday’s earnings call. “Promotional sensitivity has returned, and the competitive landscape is intensifying.”
Growth Drivers: Snacks Outperform, Beverages Face Headwinds
PepsiCo’s Frito-Lay North America division posted another strong quarter, with 7% organic revenue growth, driven by demand for brands like Lay’s, Doritos, and Cheetos. Convenience foods remain a consistent winner for the company, especially amid evolving consumer snacking habits post-pandemic.
The beverage segment, however, was more mixed. While international beverage sales grew, North American volumes declined slightly, even as pricing remained firm. Sparkling water and energy drink brands like Bubly and Rockstar faced increasing competition from niche startups and premium-priced entrants.
Quaker Foods, often seen as a bellwether for shifting breakfast habits, delivered flat sales, with only modest gains in oatmeal and ready-to-eat cereals.
What the Market Is Watching: Inflation, Promotions, and Consumer Fatigue
PepsiCo, like many consumer staples companies, faces several emerging pressures:
- Inflation: While commodity prices such as corn, aluminum, and oil have come off their 2022–23 highs, they remain above historical averages. This continues to affect packaging, transportation, and ingredient costs.
- Consumer Fatigue: After two years of price hikes across its product lineup, consumers are increasingly shifting toward private-label brands or waiting for discounts. Retail scanner data from NielsenIQ shows that promotional volume in food and beverage is at its highest level since 2019.
- Geopolitical Exposure: With significant operations in Europe, Latin America, and Asia, PepsiCo remains vulnerable to geopolitical instability and regulatory challenges in emerging markets. The company exited its Russian operations in 2023 but still faces volatility in markets like Brazil and India.
Wall Street’s Take: Defensive but Priced for Perfection
Despite Thursday’s rally, some analysts remain cautious. PepsiCo is currently trading at a forward price-to-earnings (P/E) ratio of 25.3, above the S&P 500 average and at a premium to key competitors like Coca-Cola (KO) and Mondelez (MDLZ).
“PepsiCo remains a defensive play with reliable cash flow and global scale,” said Sarah Dawson, senior consumer goods analyst at Morgan & Helms. “But with valuations stretched, the market will need to see consistent execution and improved margin trends to justify further upside.”
Of the 25 analysts covering the stock, 14 rate it a “Buy,” 9 say “Hold,” and 2 recommend “Sell.” The average 12-month price target is $190, according to FactSet.
PepsiCo’s second-quarter results offered reassurance to investors, with sales growth buoyed by a weaker dollar and ongoing global demand for snacks. But behind the earnings beat lies a more complicated story: sluggish North American volumes, rising promotional pressures, and questions about pricing power.
As inflation moderates and consumers grow more cost-conscious, PepsiCo will need to prove that its brand strength and operational discipline can sustain growth in a shifting economic environment. The short-term looks stable—but the road ahead may not be as smooth.
July 18, 2025
How America’s Hydration Obsession Turned Into a $1.5 Billion Industry
“A majority of consumers, Americans and people around the world are chronically dehydrated,” he told CNN News. “They just don’t know it.”
Even if consumers don’t know if they’re actually suffering from a lack of fluids, they’re still buying electrolyte-filled products like they are. Liquid I.V. has become one of the biggest brands to capitalize on hydration, part of the overall “better for you” wellness trend that’s been percolating within the food and beverage industry over the past several years.
Hydration, in particular, has been at the center of social media trends — like #WaterTok on TikTok — and buzzy viral products with analysts projecting it growing into a multibillion-dollar market in the next few years.
“The category has benefited from changing consumption patterns. It’s no longer just about sports recovery, but about maintaining daily wellness, and managing hangovers,” Nate Rosen, a consumer packaged goods expert, told. “A lot of people simply don’t like plain water and really treat these hydration drinks as a way to flavor their water.”
Liquid I.V. launched in 2012, initially targeted toward hardcore athletes recovering from a tough workout. The flavored powder mix is marketed as a healthier alternative to sugar-filled sports drinks, with the potion containing salt, vitamins and electrolytes that support rapid hydration.
“The category has been really tired and dusty,” Keech said. “Before, it was a sports person who was sponsored and the idea was, ‘If it’s good enough for them, then it’s good enough for me.’”
That was initially a successful proposition and sales soared, prompting Unilever to buy Liquid I.V. for an undisclosed price in 2020.
Under Keech, who became CEO of Liquid I.V. following the acquisition, the brand and his team broadened its “positioning it to a much wider audience,” shifting from just sports stars to “the business person, the mom and the gym bunny.”
From there, the brand’s distribution doubled and the product has expanded the number of flavors, including a viral firecracker blend, as well as a new sugar-free selection. Liquid I.V. is on track to becoming a $1 billion unit with Unilever labeling it a “power brand” in its most recent earnings report, which has helped its wellbeing category achieve double-digit sales growth.
“We recognized that hydration is just not for athletes,” Keech said. “That’s where lift-off happened.”
Powder power
Hydration has largely been dominated for years by liquids, notably Pedialyte, which is commonly used to prevent or treat dehydration in children. But the drink grew in popularity through the mid-2010s as young people used it as a hangover cure and athletes drank it for recovery.
Then there’s PepsiCo’s Gatorade, which holds a commanding lead in the sports drink category, plus Mexico-based Electrolit, which is investing $400 million in a new US plant to meet growing demand.
However, powders have recently become a “success story,” according to Howard Telford, head of soft drinks for analytics company Euromonitor.
“The big thing is convenience: It’s something that you can have on the kitchen counter, desk drawer at work or in the gym bag. There’s no bulky purchase where you have to allocate space to it in your fridge,” he told. “The flavor profiles are also pretty good for Liquid I.V. as well, which is not nothing.”
Keech also credits the convenience factor for Liquid I.V.’s growth, pointing toward festival-goers at Coachella, which it sponsors, as an example.
“You can’t just rock out with all sorts of water bottles,” he said. “That’s helps us hydrate people in ways others can’t.”
Sales of powdered mixes has achieved double-digit sales growth for the past four consecutive years, most recently growing 20% in 2024, ballooning into a $1.5 billion category, according to Circana, a Chicago-based market research firm.
The growth has sparked new entrants for portable mixes ranging from Gatorade, who’s sales of enhancers has grown 200% over the last four years, and Coca-Cola’s BodyArmor to smaller startups like diet-friendly LMNT and the Novak Djokovic-backed Waterdrop — all in hopes of emulating market leader Liquid I.V.’s popularity.
“When one brand achieves significant traction in a space, numerous fast followers emerge, especially when the original doesn’t own anything truly proprietary beyond a great name,” said Rosen, who writes the Express Checkout newsletter. “After all, anyone can produce an electrolyte powder.”
BodyArmor, which recently relaunched its entire line, has seen a bright spot in growth with its Flash I.V. hydration drinks and powders. Both products generated $120 million in sales in its first year.
The space “saw a big jump in consumption during Covid because people started to realize how important hydration was. There’s also a very heightened sense for longevity as a well, immunity and also overall addition of vitamins into your body,” BodyArmor CEO Federico Muyshondt told CNN News.
Does it work?
Liquid I.V. is “obsessed with science,” Keech said, adding that it spends a “very significant amount of money on clinical studies to make sure that we can stand by the claims we make.”
A page on Liquid I.V.’s website claims its product has “superior hydration” compared to simply drinking water, proclaiming that if you’re thirsty “then you already may be dehydrated.”
However, Heidi Skolnik, a senior sports nutritionist at the Hospital for Special Surgery in New York, is skeptical that dehydration is a common problem for people with unrestricted water access and that people being “chronically dehydrated is probably an overstatement.”
“Athletes and active people can benefit from using electrolyte powder and drinks,” she told The Budgets, but “less active people probably do not need them.”
Although water itself is sufficient for hydrating the average person, she said flavoring it “helps people drink more, so that is a positive and it elevates their awareness of what and how much they are drinking.”
May 24, 2025
Rick Levine, renowned for bringing a cinematic touch to commercials, passes away at the age of 94.
Rick Levine in 1988. “People don’t come to me just for pictures; they come with stories,” he said.
Rick Levine, an award-winning television commercial director who brought a big-screen sensibility to the small screen with widely celebrated spots, including a Diet Pepsi Super Bowl ad from the 1980s featuring Michael J. Fox risking life and limb for love, died on March 11 at his home in Marina del Rey, Calif. He was 94.
The death was confirmed by his daughter Abby LaRocca.
Mr. Levine was a product of what is often called the golden age of advertising. He rose in the business through the “Mad Men” era of the 1960s and founded his own company, Rick Levine Productions, in 1972. It was a time when network television held a hypnotic sway over the average American household and advertising, like so many other cultural arenas of the era, was exploding in creativity.
Often serving as his own cinematographer, Mr. Levine approached his big-budget commercials like a director of Hollywood blockbusters.
“We decided to make our ads look as good as films,” he said in a 2009 interview with DGA Quarterly, published by the Directors Guild of America. “I would direct and shoot, so I would have complete control.”
The Guild named him the best commercial director in 1981 and again in 1988, in particular for three specific spots.
Most notable among them was the Diet Pepsi commercial with Mr. Fox, which Mr. Levine made for BBDO New York. It was one of many ads he shot for Pepsi.
Known as “Apartment 10G,” the commercial stars Mr. Fox as a timid New York professional who turns heroic after he hears a knock on his apartment door and opens it to encounter a beautiful blond new neighbor (played by Gail O’Grady, later of ABC’s “NYPD Blue”). She flirtatiously asks if he has a Diet Pepsi to spare.

When a two-liter Pepsi bottle in his refrigerator turns out to be empty, a bedazzled Mr. Fox, determined to fetch what she asked for, climbs out of his bedroom window and clambers down the fire escape into a pounding rainstorm on a busy street. Mr. Fox, who did many of his own stunts, survives near-miss collisions with oncoming traffic in a mad dash to a Diet Pepsi vending machine. He returns, soaking and breathless, to present a can to the woman, only to find that her equally lovely roommate has shown up with the same request.
The ad aired during Super Bowl XXI (the New York Giants versus the Denver Broncos) on Jan. 25, 1987. It was named the world’s best video commercial the next year at the International Broadcasting Awards in Los Angeles; cited by ESPN as one of the best Super Bowl spots ever; and honored at the Smithsonian as an artifact of Americana.
Mr. Levine was admired as well for another BBDO commercial, for the chemical company DuPont, which featured Bill Demby, a real-life Vietnam veteran. He is first seen lacing up his basketball shoes in his New York City apartment before heading to a local schoolyard to shoot hoops with friends.
When he arrives, he strips down from sweatpants to basketball shorts, revealing two prosthetic legs — made from DuPont plastic — that he has relied on since being maimed in a Vietcong rocket attack. What appears to be a noble, if doomed, effort to keep up with the other players turns into a star turn for Mr. Demby, as he races around the court dishing assists and draining buckets.
Mr. Levine won a total of four Clio Awards — advertising’s equivalent of the Oscars — for both spots in 1988. In explaining his success, he told The New York Times: “I attract the story kind of commercial. People don’t come to me just for pictures; they come with stories.”
Richard Laurence Levine was born on July 10, 1930, in Brooklyn, the only child of Harry and Sally (Belof) Levine. His father was a philatelist.
After graduating in 1957 from the Parsons School of Design (now part of the New School), he worked as a graphic designer for NBC and CBS. He later became an art director for the storied Doyle Dane Bernbach agency, known for its “Think Small” campaign for Volkswagen, before moving to Mary Wells Lawrence’s agency, Wells Rich Greene, hailed for its landmark “I ♥ NY” campaign. He also served as a creative director for Carl Ally Inc.
Mr. Levine started directing ads in about 1970, creating memorable spots for a host of U.S. clients, including Coca-Cola, Federal Express, Polo Ralph Lauren and General Electric, as well as for international companies.
He became known for his episodic approach, following the same characters through a series of commercials. One campaign in the 1980s — for Pacific Bell, the California telephone company, shot for the San Francisco agency Foote, Cone & Belding — played out like a TV mini-series, with 13 spots following three characters, the close friends Garland, Lawrence and Mary Ellen, from their youth in the 1920s into their golden years.
One episode, “The Depression,” set in the desperate 1930s, portrays an act of selfless friendship when an unemployed Garland, who has been chosen to travel to a day job, purposely slips off the back of a truck crowded with other men and pretends to injure himself so that Lawrence can take his place.

The commercial, which had the warm look and feel of scenes from Don Corleone’s early years in Francis Ford Coppola’s “The Godfather Part II,” concludes with Lawrence in his later years, bathed in memories of the incident, phoning Garland to give thanks. It won a Gold Lion award at the International Advertising Festival in Cannes, France (now the Cannes Lions International Festival of Creativity).
In addition to his daughter Abby, Mr. Levine is survived by another daughter, Susan Levine Henley, who like her is from his first marriage, to Ina Levine, which ended in divorce; two grandchildren; and one great-granddaughter. His second marriage, to Lark Levine, also ended in divorce.
Despite his cinematic flair, Mr. Levine never forgot his mandate. “It’s a beautiful craft, but a craft,” he said in a 1976 interview with the trade newspaper Backstage. “It’s possible to be artistic within the confines of a commercial, of course, but that is not really my job as a commercial film director. My purpose is to make the advertising come across.”
April 11, 2025