Pepsi Sees ‘Blue Ocean Of Opportunity’ in Away-From-Home Foods

With snack food demand slipping, PepsiCo is looking to opportunities outside consumers’ homes.

The food and beverage giant released earnings Tuesday (Feb. 4) showing a drop in sales. While worldwide volumes were up, demand was weaker in North America, where Pepsi — like other companies — have warned of consumer caution.

However, management said during an earnings call that they anticipate a rebound in North American sales this year as they look for ways to boost sales in the “salty and savory” category of its FritoLay division.

“Moreover, for our own business, the big opportunity we’re also addressing is the away home opportunity, which is a blue space, a blue ocean of opportunities for us,” said CEO Ramon Laguarta. “And as consumers are being less at home and more away from home, that’s another area of opportunity.”

He also noted that the company is investing in “price partitions” that Pepsi isn’t participating in with Frito, exploring ways to attract consumers depending on their disposable income throughout the month. Still, Laguarta said, the company is proceeding with caution.

“Like the reality is that the world looks better from the unemployment point of view. There’s very low unemployment around the world. There is, I think, better inflation in most of the markets,” the CEO said.

“However, the world is very volatile … from the geopolitical point of view or some of the potential decisions that governments might take, going forward. So we think it’s prudent for us to give a guidance that reflects all that.”

Recent research by PYMNTS Intelligence shows some other sources of volatility, such as the fact that 65% of American consumers are living paycheck to paycheck, with 24% struggling to pay their bills.

“That’s nearly a quarter of Americans playing an exhausting game of financial whack-a-mole, deciding which bills to pay in full, which to pay partially and which to outright ignore until the next paycheck arrives,” PYMNTS wrote earlier this week.

This strain has led many to prioritize immediate survival over long-term financial planning, with a major portion of American consumers turning to short-term, reactive strategies to keep on top of their financial obligations.

Rather than negotiating better rates or cutting non-essentials, many are skipping or partially paying bills (33%) or simply canceling services (22%). Just 12% are engaging in proactive financial maneuvers, such as shopping for cheaper insurance or renegotiating utility contracts. However, there’s a problem with this approach.

“It’s like putting a Band-Aid on a broken leg — it doesn’t solve the core issue, and in many cases, it can make things worse,” PYMNTS wrote.