PepsiCo Removing Synthetic Colors, Expanding ‘Value’ Brands

PepsiCo in the remainder of this year will be removing synthetic colors from some of its leading salty snacks, expanding value brands (such as Santitas and Chester’s) and using more avocado or olive oil – all in an effort “to improve our marketplace performance and [or] to reduce costs.”

Ramon Laguarta, chairman and CEO, said those are among coming attractions as the giant soda and snack company announced mixed results for its second quarter ended June 14. He said the K-12 school foods portfolio already is removing synthetic colors for the start of the upcoming school season.

“We are restaging large brand platforms such as Lay’s and Tostitos with no artificial colors or flavors by the end of this year,” he told financial analysts. “We plan to introduce extensions of Cheetos and Doritos that will contain no artificial colors or flavors. We will expand the use of avocado or olive oil across certain brand platforms and enhance certain products with protein, fiber and whole grains later this year and into next year within our Frito-Lay and Quaker portfolios.”

Sales in the second quarter inched up 1%, to $22.726 billion, although half-year sales, at $40.645 billion, remained a hair below first six months of 2024. Net income in the second quarter was slashed 59% to $1.263 billion; in 2024 it was $ 3.083 billion. International sales have been a standout, growing 6% in the second quarter, “the 17^th consecutive quarter in which we delivered at least mid-single digit organic revenue growth.”

Laguarta also said the company is looking for “synergies between our North American beverage and convenient foods businesses” to reduce costs. In the beverage business, PepsiCo will grow “attractive segments” such as zero sugar, functional hydration, sports nutrition and away from home.

“We continue to expect incremental supply chain costs -- primarily related to the sourcing of certain global inputs and ingredients and related tariff impacts -- for the balance of 2025 and are implementing mitigation strategies to partially reduce these incremental costs.” Later, he added, “We will continue to control what we can.”

With the new measures in place, the company forecasts small improvement in its financial guidance for the full year, now projecting low-single-digit organic revenue growth and a 1.5% decline in earnings per share, better than the earlier forecast 3% decline.