PepsiCo Both Hurt and Helped by Pandemic

July 15, 2020
PepsiCo’s sales for the most recent quarter stayed flat, mostly because the effect of the pandemic on its business has been almost symmetrical.

PepsiCo’s sales for the most recent quarter stayed flat, mostly because the effect of the pandemic on its business has been almost symmetrical, hurting and helping in equal measure.

Packaged-food sales, mostly through PepsiCo’s Frito-Lay and Quaker Oats units, were up 6.6%, mostly because consumers forced to quarantine at home have increased their consumption of snacks and pantry basics. But North American beverage sales were down 6.6%, in large part also due to the pandemic; consumers aren’t buying fountain drinks at restaurants, theaters and other venues. Total organic revenue for the quarter dropped 0.3%.

“This is going to be, you know, a roller coaster,” CEO Ramon Laguarta said in a call with analysts July 13.

PepsiCo’s quarter ended June 13, before a surge in cases of COVID-19 forced Texas and other states to reconsider opening restaurants and bars. Once the nation does start to reopen, PepsiCo expects to see beverage sales increase while packaged-food sales drop, CFO Hugh Johnston told the analysts.