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PepsiCo releases its quarterly and 2023 results

Company delivers 9.5% organic revenue growth for 2023 even with Quaker product recall.
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PepsiCo bottles

PepsiCo, an international food and beverage company with products available in more than 200 countries, reports that it fell short of its full-year sales forecasts and reported drops in volumes in the company’s North American beverage and Quaker foods segments. 

According to the company, Frito-Lay North America delivered 9% organic revenue growth in 2023 – which compares to 17% organic revenue growth in 2022. The business gained market share across the savory and macro snack categories for the full year. Core operating margin expanded 35 basis points for the full year and reflects the benefits of cost management initiatives, an increase in advertising and marketing spend and planned business investments. In the fourth quarter, organic revenue increased 3%—which compares to 18% organic revenue growth in the prior year quarter.

Frito-Lay’s performance for the full year was aided by offering more choices to meet the changing needs and preferences of consumers, through:

• Expanding the variety of positive choice offerings with air popped, baked, reduced fat, lightly salted and Simply branded products, as well as smaller pack sizes that to meet consumer demand for portion control

• Refreshing and extending the lineup of bold flavor profiles across large brands with Cheetos Flamin’ Hot Tangy Chili Fusion, Doritos Sizzlin’ Hot, Tostitos Mexican Style Three Cheese, Doritos Spicy Pineapple Jalapeno, Funyuns Spicy Queso Onion Flavored Rings, Ruffles Flamin’ Hot Queso, and Smartfood Doritos Nacho Cheese Flavored Popcorn

• Offering more packaging diversification with multipacks, variety packs and the introduction of Frito-Lay Minis

• Expanding the scope and presence of products and packages to capture new consumer occasions across the away-from-home channel by extending the company’s brands into meal occasions with products such as the Tostitos, Fritos and Doritos walking taco and offering brand-specific experiential platforms with food trucks, carts and pop-up eating destinations. 

Quaker Foods North America’s organic revenue increased 1% for the full year with double-digit net revenue growth in lite snacks and pancake syrup and mix, on a 52-week basis. Quaker Foods North America gained market share in lite snacks, pancake syrup and mix, and grits for the full year. Fourth quarter organic revenue declined 10%, reflecting the impact of product recalls.

READ: Quaker cereals and granola bars recalled due to possible salmonella contamination

PepsiCo Beverages North America’s organic revenue increased 7% in 2023—which compares to 11% organic revenue growth in the prior year. For the fourth quarter, the business delivered 3% organic revenue growth—which compares to 10% organic revenue growth in the prior year quarter.

In 2023, the business from continuing efforts to shift the towards more-profitable growth areas such as: Zero Sugar variants across such key brandsas Pepsi Zero Sugar, Mountain Dew, Gatorade, Starry, Mug and Rockstar; sports nutrition and hydration offerings such as Gatorade, Propel, bubly and LifeWTR;  and energy drinks such as our Rockstar, Fast Twitch, Starbucks, and Lipton varieties, and the integration of the Celsius brand into the portfolio.

“We are pleased with our results for 2023 as PepsiCo delivered 9.5% organic revenue growth. This compares to 14.4% organic revenue growth in 2022 and brings our three year compound annual organic revenue growth rate to 11%. Our global convenient foods business delivered 10% organic revenue growth while our global beverage business delivered 8% organic revenue growth in 2023.,” said chairman and CEO Ramon Laguarta, in a prepared statement upon the release of the results.

“Since embarking on our aspirations to modernize our company and accelerate growth, our total net revenue and core EPS have risen more than 35% since 2019 to the record levels achieved in 2023,” he continued. “From a marketplace perspective, in 2023 we held or gained share in more than half our key global beverage and convenient foods markets and received the #1 manufacturer ranking in the Kantar PoweRanking survey for the eighth consecutive year, a testament to the strong and collaborative relationships we maintain with our valued customers and partners. Our performance has benefited from the continued investments we have made in our people, brands, supply chain, go-to-market systems, and technology over recent years to become an ‘Even Faster, Even Stronger, and Even Better’ organization.”

“In the coming year, we will elevate the focus on our holistic cost management initiatives to accelerate productivity and use the savings to both mitigate cost inflation and prioritize support for more investments in our brands, innovation, and channel expansion,” he added. "As a result, we now expect to deliver at least 4% organic revenue growth and at least 8% percent core constant currency earnings per share growth in 2024, which should result in another year of record performance. We also announced a 7% increase in our annualized dividend, starting with our June 2024 payment which represents our 52nd consecutive annual increase.”

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