PepsiCo Reports Shift Towards Smaller Packaging

Published 7 months ago

PepsiCo, the food and beverage titan, has observed a shift in consumer preferences towards smaller packaging. This change, according to the company’s third-quarter earnings report, is not only due to lower prices but also because of the convenience and portion control that smaller packages provide.

CEO Ramon Laguarta noted during a Q&A session accompanying the report that units are growing “much faster” than volume. This indicates a trend among consumers towards these smaller sizes. To maintain affordability, PepsiCo has been reducing the portion size of its products, impacting the actual volume.

Economic Struggles Impacting Consumer Choices

Many consumers are currently facing financial difficulties. A report by PYMNTS Intelligence, in collaboration with Sezzle, found that 49% of consumers have trouble paying their bills as they once did. Furthermore, the report revealed that consumers have an average of $189,754 in total outstanding debt.

These financial challenges have undeniably followed consumers to the grocery store. A study by PYMNTS Intelligence and Splitit revealed that about 1 in 5 shoppers has used some type of installment payment plan in the past year to purchase groceries.

Despite these difficulties, consumers continue to prioritize their preferred brands. PYMNTS Intelligence’s study found that only a third of grocery shoppers have downgraded from their favorite brands to save money. Additionally, three-quarters of all consumers still buy “nice-to-have” items at the grocery store at least sometimes, according to a report by PYMNTS Intelligence in collaboration with LendingClub.

PepsiCo’s Approach To Changing Consumer Behavior

In response to these changes in consumer behavior, PepsiCo continues to strategize and optimize. Laguarta stated that the company aims to absorb inflation and ensures that their brands remain a choice for consumers with limited disposable income.

Speaking about PepsiCo’s collaboration with grocery technology giant Instacart, Laguarta highlighted the value of data about consumer behaviors. The company aims to use digitalization to enhance decision-making across various activities to generate value for its consumers.

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