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PROMOS BOOST PEPSICO EARNINGS

News, 14 July 2000


Boosted by such high profile promotions as Pokemon in Latin America and the Pepsi Challenge in the US and Europe, earnings at PepsiCo rose 21% in the second quarter. The period also saw the advertising debut of Aquafina, its bottled water brand.

Despite an increase among US consumers in so-called "cola fatigue", PepsiCo is to extend the Pepsi Challenge program this summer to supermarkets and other heavy-footfall outlets.

Overall, the latest results demonstrate that Pepsi, the world's second-largest cola brand, now relies on non-cola products for much of its growth. Its Frito-Lay salty snacks units, which contribute more than 60% of profits, saw volumes rise 5% in North America and double digit growth in countries such as Mexico and the UK [where it retails under the Walkers brand]. This level of growth contrasts with industry estimates of soft drink volumes, which are expected to rise only 3-4% this year.

PepsiCo group earnings rose to $563m (38 cents per share) compared with $467m (31 cents) for the same period in 1999.

News source: Financial Times