PepsiCo (NASDAQ:PEP) is the 2nd largest soft drinks company in the world selling carbonated beverages or soda pop. Occasional consumption is brilliant but drinking them a lot isn’t healthy if you’re looking to prevent health problems. With this in mind, PepsiCo is trying to steer their portfolio in a more healthier direction. They are known for selling brands such as Mountain Dew and Gatorade. The company wants to ensure that the primary drive of Pepsi revenue is healthy drinks and snacks, and in fact, the company’s organic revenues have grown, with PepsiCo working towards transforming itself to conform more to what their customers are wanting – a healthier lifestyle. To strive towards a more healthier image’ PepsiCo have been investing in research to identify new ingredients so as to improve their products. They are also investing in advanced manufacturing technologies to come up with healthier products. Their proprietary frying innovation, for instance, promises to reduce the amount of fat in their potato chips by 20%.
PepsiCo has also launched their Tropicana Essentials Probiotics, to cater for those moving away from carbonated drinks to juices. Reduced sugar sodas from brands such as 7Up are also encouraging consumers to take a new look as they look to drink their favorites with less sugar content. It’s no wonder that with so much emphasis on healthier living. PepsiCo is set to generate millions from their water brand LIFEWTR.
The company has also adopted a motto of performance with Purpose’ so as to meet the changing needs of their customers. They are shifting their portfolio to a wider range known as everyday Nutrition Products’. These are products which contain nutrients such as fruits, vegetables and protein. When you consume them, you can be confident you won’t be packing calories onto your waistline, and they are therefore referred to as guilt-free products’. In other words, when you drink some of these guilt free’ beverages, you’ll discover that they have less calories in them and are also lower in sodium. PepsiCo is busy deriving 45% of its revenue from these guilt-free products. Demand for healthier food is on the rise, and PepsiCo has a clear strategy in place to transform its product portfolio toward these Guilt Free Products.
The company has beat consensus expectations on revenue and earnings, and in spite of higher transportation costs and increased marketing expenditure, solid performance and outlook have prompted PepsiCo to improve its organic revenue, and they are getting results. The Allied Market Research estimates that the Asian guilt free’ snacks segment is likely to grow at a CAGR of 14.5% right up to 2022. With its focus on healthy products, PepsiCo’s healthier snacks and beverages are looking to see a significant amount of the company's long-term growth.
Going Healthier is Paying Off for PepsiCo, which has done a lot to shift its portfolio of carbonates to a healthier portfolio and has been launching new brands such as probiotics and sparkling waters. PepsiCo is a huge food manufacturer who continues to outperform rivals, and the drive to make PepsiCo’s portfolio more healthy by adding new products to tackle new food and beverage trends is paying off.