PepsiCo's CEO addresses declining revenue by offering smaller snacks and removing artificial colors

From Yahoo Finance: 2025-04-27 11:03:00

PepsiCo’s first-quarter earnings report for 2025 shows a decline in net revenue by almost 2%, with North American food revenue down by 1% and savory snack volume shrinking by 4%. U.S. beverage revenue remained flat, but faced declines in non-carbonated and carbonated drink volume.

To combat weaker consumer demand, PepsiCo plans to offer smaller-sized snack options at lower prices. CEO Ramon Laguarta emphasized the importance of entry price points to keep consumers engaged with the brand and address financial challenges consumers may be facing.

In response to concerns about product ingredients, PepsiCo will remove artificial colors from brands like Lay’s and Tostitos by the end of the year. Over 60% of current products don’t contain artificial colors, and the transition to natural colors will continue over the next couple of years.

The move to remove artificial colors comes amid increasing awareness of health and wellness issues surrounding synthetic dyes like Blue 1, Red 40, and Yellow 6. Robert F. Kennedy Jr. plans to ban artificial dyes from all U.S. food products by the end of the year.

PepsiCo’s organic revenue is expected to increase only by a low single-digit for 2025, due to looming tariff threats, consumer uncertainty, and subdued performance from Frito Lay. The company also faces a boycott threat over scaling back its diversity, equity, and inclusion program.

Read more: PepsiCo CEO addresses major customer concerns amid low sales