PepsiCo on Tuesday reported a “high single-digit growth” in its beverage unit volume in the Indian market during the first quarter of 2024.
The company’s convenient food business reported a “double-digit growth” in the country during the period, according to a global earnings statement from the food and beverages major.
PepsiCo’s net revenue in the Africa, Middle East, and South Asia (AMESA) division, which covers the Indian market, went up by 2 per cent to USD 1.04 billion.
The company said the increase reflected “organic volume growth and effective net pricing” and partially offset the impact of unfavorable foreign exchange.
In AMESA, PepsiCo’s “beverages unit volumes grew 2 percent, primarily reflecting mid-single-digit growth in the Middle East and high single-digit growth in India”.Its convenience foods unit volume increased 4.5 percent, “primarily reflecting high-single-digit growth in South Africa, double-digit growth in India”, offset by double-digit declines in the Middle East.
However, PepsiCo’s operating profit in AMESA declined 10 percent in the first quarter due to “increases in certain operating costs.” This includes a 1 percentage-point impact of higher commodity costs, primarily packaging materials, sweeteners and potatoes, and a 7-percentage-point impact on an adjustment related to the sale of a non-strategic brand last year.
The company said it has also gained year-over-year share of gourmet snacks in China and India.
PepsiCo, which owns popular brands like Lay’s, Doritos Cheetos, Gatorade, Pepsi-Cola, Mountain Dew and Quaker, reported a 2.26 percent increase in net revenue to US$18.25 billion in the first quarter.The growth was led by PepsiCo’s international business, which delivered “significant volume improvement compared to the previous quarter as well as strong organic revenue growth and core operating profit growth,” the New York-headquartered multinational said.
President and Chief Executive Officer Ramon Laguarta said, “During the first quarter, our business remained active and performed well, with strong performance from our international business. We had sequential improvement in our volume trends, and year-over-year growth in our net -Years increased.” Revenue, operating profit margin and EPS, despite the impact of certain product recalls in Quaker Foods North America and tougher net revenue growth compared to the prior year.
On the outlook, PepsiCo said it is consistent with its earlier guidance for 2024 and expects “at least 4 percent growth in organic revenues.”
PTI
