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Over the past few months, PepsiCo (PEP) , which owns popular food and drink brands such as Pepsi, Lay’s, Gatorade, Tostitos, Quaker, and more, has suffered from weaker consumer demand, which has negatively impacted its profits.
In PepsiCo’s first-quarter earnings report for 2025, it revealed that its net revenue declined by almost 2% year-over-year during the quarter. Specifically, PepsiCo foods in North America faced a 1% decrease in revenue, while volume for savory snacks shrunk by 4%.
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Also, the company’s U.S. revenue from its beverages remained flat as it faced a 6% decline in non-carbonated beverage volume and a 1% decline in carbonated soft drink volume.
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In the report, PepsiCo CEO Ramon Laguarta said that “consumer conditions in many markets remain subdued” and “have an uncertain outlook.” He said that the company will be “taking actions to improve performance in North America.”
PepsiCo CEO addresses customer pain points
During an earnings call on April 24, Laguarta said that PepsiCo will double down on offering lower prices to consumers through smaller-sized snack offerings as it recognizes that “consumers are feeling more challenged with their disposable income.”
“We’re putting more emphasis on those entry price points and making sure that we’re not asking for a large amount of money for participating in our brands, and that’s why smaller single-serve, smaller multi-packs, those are all tools for us to keep the consumers in the brand and make sure that the frequency is there as well,” said Laguarta.
He also said that, in response to recent concerns about the ingredients in PepsiCo products, several of the company’s brands will soon no longer contain artificial colors.
“Brands like Lay’s will be out of artificial colors by the end of this year, the same with Tostitos, so some of our big brands," said Laguarta. "So we’re well underway. Ideally, obviously, we stand by the science, and our products are very safe, there’s nothing to worry about this. But we understand that there’s going to be probably a consumer demand for more natural ingredients, and we’re going to be accelerating that transition.”
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Currently, over 60% of the company's products doesn't contain artificial colors. Laguarta said that within “the next couple of years,” all PepsiCo products will undergo a similar change.
“Ideally, we can do this in a very pragmatic, orchestrated way as an industry, and not create unnecessary panic or chaos,” said Laguarta. “But we’ll lead that transition, and in the next couple of years, we’ll have migrated all the portfolio into natural colors, or at least provide the consumer with natural color options, and obviously, every consumer will have the opportunity to choose what they prefer.”