How Pepsi's diversity could be paying off

Better-than-expected profits as the company looks past their trademark beverage...

PepsiCo has beaten Wall Street profit expectations as its new products appear to be doing the business for the world-famous drinks company.

Shares rose 2.2% in premarket trading, with the net income attributable to PepsiCo climbing to over $2 bn. Lower raw material costs helped its numbers in the three months to June 11th.

Crucially, 9% of its revenue can now be attributed to its new range of products.

The company has diversified into the snacks and breakfast foods game in the US – they're behind Frito-Lay chips – whilst they boost a considerable portfolio of beverages.

Alongside Pepsi itself and the likes of Gatorade and Mountain Dew, new drinks have arrived in the form of Propel flavoured water and Naked Cold Pressed Juice, as well the "hipster variant" on its flagship drink, Pepsi 1893.

Pepsi 1893 is advertised as having "real sugar" and "aromatic bitters", and has released ads parodying the craft beer phenomenon (whilst also clearly attempting to get on the "authentic" bandwagon themselves).

Crystal Pepsi, a clear drink that failed to capture the public's imagination in the early '90s, is also being reintroduced to North America this summer for a potential nostalgia effect.

Last summer, the company's decision to remove the artificial sweetener aspartame from Diet Pepsi caused sales to plunge. Pepsi's decision to bring back the old formula – alongside the new one – last month suggests they're doing their utmost to gauge the America public and adapt quickly. 

US consumption of soda is at a 30-year low, according to Beverage Digest Soda, with declines now on an 11-year-in-a-row streak.

Long-time rival Coca-Cola has also been attempting to adapt to the changing climate with new offerings.

In a conference call, PepsiCo CEO Indra Nooyi dismissed notions that its portfolio is getting too complicated. He argued:

"We have to learn how to handle complexity, not walk away from it."

 

 

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