PepsiCo’s (PEP) Q2 2017

posted in: Earnings Call, Notes | 0

CEO Indra Nooyi

Business in Latin America performing well in spite of the challenges

“in Latin America we continue to see very challenging macroeconomic conditions, geopolitical instability, and high levels of inflation in key markets, including Brazil and Argentina, which are dampening consumer spending. Within this context, our businesses are performing well.”

Strategies to counter increased global challenges

“We are pricing to cover the increased cost of doing business, we are going more aggressively after productivity to reduce our overall costs, and we continue to transform our beverage portfolio to offer more non-carbonated options and reducing sugar levels across the portfolio.”

They are paying attention to e-commerce

“The good news is, our e-commerce business is growing brilliantly. We are doing very, very well. We are not yet ready to talk about it in any significant way….it’s growing with our traditional products and our traditional packaging, if you want to call it that….we are looking at meaningful innovation, both in snacks and beverages, in order to address the exploding growth of e-commerce”

Retail is changing and we must change with it

“Perhaps more pronounced are the changes we are witnessing in retail where the lines are blurring between channels…the channels are beginning to blur between food service, retail, home delivery, restaurants, everything, the channels are beginning to blur….you now have a shopping occasion being replaced by home delivery or replaced by a meal delivery of kits. So what we have to do is rethink what is the real growth of the marketplace, the food and beverage marketplace, in a much more holistic way…we all as manufacturers have to start to rethink how we serve this multiplicity of channels and how we should retool our business models to serve every one of these fragmenting channels.”