Price hikes lifted PepsiCo’s profits in the third quarter, but the company says those increases are likely to moderate in the coming year.
Pepsi raised prices 11% in the July-September period, the seventh straight quarter that the Purchase, New York, company has increased prices by double-digits.
The higher prices took a toll on demand, with sales volumes down 2.5%.
PepsiCo said some of that volume decline is strategic.
The company said it has been shrinking package sizes to meet consumer demand for convenience and portion control.
Units are growing much faster than volume, PepsiCo Chairman and CEO Ramon Laguarta said Tuesday in a conference call with investors.
But there is also some consumer pushback on prices. Consumers are looking for value and, in some cases, are trading down to cheaper stores.
I do think that we see the consumer right now being more selective, PepsiCo’s Chief Financial Officer Hugh Johnston said Tuesday on a conference call with investors.
Still, Johnston said convenience store sales and food service sales, which usually weaken in times of high consumer stress, are strong.
Johnston said Pepsi continues to see higher prices for commodities like grain and cooking oil.
In 2024, Pepsi expects inflation to be slightly higher than the 2% to 3% it was accustomed to before the pandemic.
Consumers should expect to see price increases roughly in line with inflation, he said.
Pepsi is watching the growing use of weight loss drugs like Ozempic, but so far their impact on the business has been negligible, Laguarta said.
They could be outweighed by other trends, including rising incomes in many countries and the growing popularity of snacking in place of meals.
Were seeing a lot of tailwinds that will continue to drive our categories, he said.
Pepsi shares were up 1.5% in morning trading.
In the third quarter, Frito-Lay North America sales volumes dropped 0.5% during the July-September period as net prices rose 8%.
North American beverage sales volumes dropped 6% as prices rose 12%.
Sales volumes in Europe were flat. Sales volumes in Latin America dropped 5%.
Net pricing includes price hikes as well as changes in the mix of products sold and smaller package sizes.
In prepared remarks Tuesday, PepsiCo said consumers are gravitating toward smaller packages for convenience and portion control.
Net revenue was $23.4 billion, the company said Tuesday. That was in line with Wall Streets expectations, according to analysts polled by FactSet.
Net income for Pepsi rose 14% to $3.1 billion, or $2.24 per share.
That beat the $2.15 per share that analysts had forecast.
Pepsi now expects its full-year earnings per share to increase 13%, up from previous projections of 12%, due to the strength of its sales and cost-cutting efforts.
He’s played Sherlock Holmes, Doctor Strange, and even voiced The Grinch but acting opposite a seven-foot (2.1m) crow may be one of the strangest roles Benedict Cumberbatch has taken on.
Speaking about his new film, The Thing With Feathers, he admits it’s “a very odd job, there’s no getting away from it”.
If the vision of Cumberbatch wrestling with a giant bird sounds like the sort of amusingly surreal movie you fancy taking a look at next week, it’s important to understand that this is no comedy.
Image: Pic: The Thing With Feathers/Vue Lumiere
Image: Pic: The Thing With Feathers/Vue Lumiere
While the film, based on Max Porter’s eclectic novella Grief Is The Thing With Feathers, the film is at times disturbingly funny, but mostly it is an incredibly emotional take on the heartbreaking way we all process grief.
Cumberbatch plays a man whose wife has died suddenly, leaving him with their two young boys. The story itself is split into three parts – dad, boys and crow.
Crow – voiced by David Thewlis – is a figment of dad’s imagination, a sort of “unhinged Freudian therapist” for him, according to Porter.
Cumberbatch, a father of three, said this certainly wasn’t a role he wanted to think about when he returned to his own family each night.
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“I didn’t take it home, I didn’t talk about it…You have to work fast when you’re a father of three with a busy home life, you know, it’s very immediate the need they have of you, so you don’t go in and talk about your day crying your eyes out on a sofa with a crow punching you in the face.”
Image: Benedict Cumberbatch in The Thing With Feathers. Pic: Vue Lumiere
Since Porter’s award-winning work was first published in 2015 it has built a cult following.
Using text, dialogue and poetry to explore grief from various characters’ perspectives, the author says the subject matter is universal.
“Most of us are deeply eccentric in one way or another, like my father-in-law, apparently a very rational, blokey bloke, who’s like ‘when my mum died, a wren landed on the window and I knew it was my mum’.
“Grief puts us into these states where we are more attuned to the natural world and particularly more attuned to symbols and signs. So, imagining a crow moving in with the family actually makes a lot of sense to people, whereas, weirdly, five steps to getting better or get well soon or a hallmark card or whatever doesn’t make much sense to the people when you’re in that storm of pain.”
While the film sees Cumberbatch portray a firestorm of emotions, he says he feels it’s important to tackle weighty issues on screen.
Image: Benedict Cumberbatch
Image: Max Porter
“It is a universal experience, in one way or another you’re ‘gonna lose someone that you love during your life.”
The film, he says, explores grief through a male prism.
“At a time when there’s a lot of very troubling influences on men without female presence in their lives, this thing of scapegoating and seeing the other as a threat, all of that comes into play within the allowance of grief to be a messy, scary, intimidating, chaotic, unruly and out of control place to exist as a man.
“This is a film that just leans into the idea that it’s alright to have feelings, you bury them or hide them at your peril.”
The Thing With Feathers is out in cinemas in the UK and Ireland on 21 November.
Brazil was “a bit surprised” Britain hasn’t contributed to a new investment fund to protect tropical forests, despite having helped to design it, a senior official has told Sky News.
The Amazon nation has used its role as host of the COP30 climate talks to tout its new scheme, which it drew up with the help of countries including the UK and Indonesia.
The news came out the day before Brazil was about to launch it.
“The Brazilians were livid” about the timing, one source told Sky News.
Image: Lush rainforest and waterways in the Brazilian Amazon
Image: A waterfall in Kayapo territory in Brazil
Garo Batmanian, director-general of the Brazilian Forestry Service and coordinator of the new scheme, said: “We were expecting [Britain to pay in] because the UK was the very first one to support us.”
The so-called Tropical Forests Forever Facility (TFFF) was drawn up with the help of “very bright people from the UK”, according to Mr Batmanian.
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“So we are a bit surprised, but we expect that once internal situations get better, hopefully they will come through,” he added.
The UK’s climate envoy, Rachel Kyte, told Sky News: “The PM agreed the decision was about not doing it now, as opposed to not ever.
“We will look at the TFFF after the budget and are carefully tracking how others are investing.”
Image: Forest growing back from a fire (bottom left) and deforestation alongside healthy sections of Amazon rainforest
The fund has been hailed as a breakthrough – if Brazil can get if off the ground.
Paul Polman, former Unilever boss and now co-vice chair of Planetary Guardians, said it could be the “first forest-finance plan big enough to change the game”.
Why do tropical forests need help?
At their best, tropical forests like the Amazon and the Congo Basin provide food, rainfall and clean air for millions of people around the world.
They soak up carbon dioxide – the main driver of climate change – providing a cooling effect on a heating planet.
But they are being nibbled away at by extractive industries like oil, logging, soy and gold.
Parts of the Amazon rainforest already emit more carbon dioxide than they store.
Other pockets are expected to collapse in the next few decades, meaning they’d no longer be rainforests at all.
Image: Greenpeace says deforested land could be better used, which would save the need for more land to be cleared
Cristiane Mazzetti, senior forest campaigner at Greenpeace Brazil, said: “Science is saying we need to immediately stop deforestation and start restoring what was once lost.
“And in Brazil, we already have enough open land that could be better used for agricultural expansion… There is no need [to open up] new areas.”
Can Brazil’s new investment fund save the world’s rainforests?
For decades, forests have been worth more dead than alive.
Successive attempts to save them have fallen flat because they’ve not been able to flip the economics in favour of conservation, or ensure a long-term stream of cash.
Brazil hopes the TFFF, if it launches, would make forests worth more standing than cut down, and pay out to countries and communities making that happen.
Image: Mining is a lucrative industry in the Amazon. Pic: Reuters
“We don’t pay only for carbon, we are paying for a hectare of standing forest. The more forests you have, the more you are paid,” said Mr Batmanian.
The other “innovation” is to stop relying on aid donations, he said.
“There is a lot of demand for overseas development assistance. It’s normal to have that. We have a lot of crisis, pandemics, epidemics out there.”
Instead, the TFFF is an investment fund that would compete with other commercial propositions.
Mr Polman said: “This isn’t charity, it’s smart economic infrastructure to protect the Amazon and keep our planet safe.”
How does the TFFF raise money?
The idea is to raise a first tranche of cash from governments that can de-risk the fund for private investors.
Every $1 invested by governments could attract a further $4 of private cash.
The TFFF would then be able to take a higher amount of risk to raise above-market returns, Brazil hopes.
That means it could generate enough cash to pay competitive returns to investors and payments to the eligible countries and communities keeping their tropical trees upright.
At least 20% of the payments has been earmarked for indigenous communities, widely regarded as the best stewards of the land. Many, but not all, have welcomed the idea.
Will the TFFF work?
The proposal needs at least $10-25bn of government money to get off the ground.
So far it has raised $5.5bn from the likes of Norway, France, and Indonesia. And the World Bank has agreed to host it, signalling strong credibility.
But it’s a hard task to generate enough money to compete with lucrative industries like gold and oil, many of which governments already invest in.
Image: Dr Andreza Aruska de Souza Santos, director, Brazil Institute, King’s College London
Dr Andreza Aruska de Souza Santos, director of King’s College London’s Brazil Institute, said TFFF has the potential to make it “very financially viable to have a forest as a forest”.
“But the problem is that TFFF would need to compete with these very profitable industries… because you need to capture as much money from governments, from investors.
“And so far it’s not quite balancing the competitiveness of other sectors that are potentially harmful for forests.”
Hot, humid, loud and proud: the climate protest in the city of Belem was the embodiment of the Amazonian rainforest that surrounds it.
Hawkers brought carts selling bananas, mangoes and coconuts – while demonstrators bore umbrellas, hats and fans to shelter from the scorching tropical sun.
After a week of dreary negotiations at the COP30 climate talks, the streets were alive with the drumming of maracatu music and dancing to local carimbo rhythms on Saturday.
It was a carnival atmosphere designed to elevate sober issues.
Image: The climate protest in the city of Belem
Among those out on the streets were Kayapo people, an indigenous community living across the states of Para and Mato Grosso – the latter at the frontier of soy expansion in the Brazilian Amazon.
They are fighting local infrastructure projects like the new Ferrograo railway that will transport soy through their homeland.
The soy industry raises much-needed cash for Brazil’s economy – its second biggest export – but the kayapo say they do not get a slice of the benefit.
Uti, a Kayapo community leader, said: “We do not accept the construction of the Ferrograo and some other projects.
“We Kayapo do not accept any of this being built on indigenous land.”
Many Brazilian indigenous and community groups here want legal recognition of the rights to their land – and on Friday, the Brazilian government agreed to designate two more territories to the Mundurucu people.
It’s a Brazilian lens on global issues – indigenous peoples are widely regarded as the best stewards of the land, but rarely rewarded for their efforts.
In fact, it is often a terrible opposite: grandmother Julia Chunil Catricura had been fighting to stay on Mapuche land in southern Chile, but disappeared earlier this year when she went out for a walk.
Lefimilla Catalina, also Mapuche, said she’s travelled two days to be here in Belem to raise the case of Julia, and to forge alliances with other groups.
Image: The protest in the city of Belem
“At least [COP30] makes it visible” to the world that people are “facing conflicts” on their land, she said.
She added: “COP offers a tiny space [for indigenous people], and we want to be more involved.
“We want to have more influence, and that’s why we believe we have to take ownership of these spaces, we can’t stay out of it.”
They are joined by climate protesters from around the world in an effort to hold governments’ feet to the fire.
Louise Hutchins, convener of Make Polluters Pay Coalition International, said: “We’re here to say to governments they need to make the oil and gas companies pay up for the climate destruction – they’ve made billions in profits every day for the last 50 years.”
After three years of COPs with no protests – the UAE, Egypt, and Azerbaijan do not look kindly on people taking to the streets – this year demonstrators have defined the look, the tone and the soundtrack of the COP30 climate talks – and Saturday was no different.
Whether that will translate into anything more ambitious to come out of COP30 remains to be seen, with another week of negotiations still to go.
For now, the protests in Belem reflect the chaos, the mess and the beauty of Brazil, the COP process, and the rest of the world beyond.