PepsiCo reported a pullback in its core soda business on Thursday, saying volumes in its North American soft drinks segment fell 2% in the third quarter and cutting its sales-growth outlook for the fourth quarter.
CEO Ramon Laguarta, speaking on the company’s earnings call, described the beverage division as a weak spot. “We do not feel good about the beverage business,” he said, and added the company is treating soft drinks as an urgent priority.
The decline in soda volumes is part of a broader consumer slowdown. PepsiCo executives pointed to households tightening spending as wages lag inflation, and noted that US consumer sentiment has recently dipped below pandemic levels. “We don’t expect the consumer to suddenly become much more in a much better place in the next 12, 18 months,” Laguarta said.
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Pepsi reports drinkers are cutting back and buying less of its soda
PepsiCo said the strained spending environment is affecting snacks as well as beverages, naming brands such as Cheetos and Siete chips among those seeing pressure. At the same time, the company said some categories — notably energy drinks — continue to perform strongly.
To respond, PepsiCo is pursuing a mix of price and packaging moves and cost savings. The company recently reduced prices on some snack items — cutting prices by as much as 15% on products including Lay’s and Doritos — and said last month it plans to raise prices on chips and soda later this year and in early 2027. Laguarta said the company intends to plow savings from cost reductions back into its North American beverage and snacks business to try to lift performance.
Market reaction was muted: PepsiCo shares rose about 0.9% on Thursday after the results, the company said.
The statements and figures above were disclosed by PepsiCo and reported on the company’s earnings call; broader comments about consumer sentiment and spending were included in the reporting of the results.
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