During the pandemic, snack food prices surged by 23% over a two-year period from mid-2021 to mid-2023, according to the consumer price index.
This increase in pricing has led consumers to cut back on their spending on snacks. PepsiCo, the parent company of Frito-Lay, reported a 0.5% decrease in revenue for the snack brand in the last quarter compared to the same period last year.
Additionally, Frito-Lay’s net profit dropped by 3.5% compared to the second quarter of 2023.
PepsiCo CEO Ramon L. Laguarta suggested that certain products may need to have lower prices to meet consumer demand.
“There is a segment of consumers who are facing challenges and are expressing a desire for more value from our brands, particularly in certain parts of our portfolio,” he said. “We are working on different strategies to meet these consumer demands.”
RELATED STORY | Inflation subsides as incomes more than keep up with rising cost of living, government data says
The company noted a decline in sales of unsalted snacks, while flavored potato chips continue to be popular among customers.
Laguarta also mentioned, “For certain consumers, we may need to introduce new entry price points and promotional strategies that make it easier for consumers to make purchases of salty snacks.”
When asked about the impact of the increase in weight loss medication on the company, Laguarta responded, “I don’t believe weight loss medication currently has a significant impact on our category. We regularly engage with consumers and it has not had a noticeable effect on us.”
