CEO Ramon Laguarta cites $4.56/gallon gas as key driver of flat food and declining beverage volumes in North America.
PepsiCo reported flat North American food volumes and a 4% drop in beverage volumes for Q2, despite cutting prices on brands like Lay’s and Doritos by 15%. CEO Ramon Laguarta attributed the weakness to elevated gas prices, which reached a four-year high of $4.56 per gallon in late May due to oil disruptions tied to U.S.-Iran tensions.
The price cuts failed to stimulate demand, particularly in impulse-driven channels like convenience stores. Laguarta noted a slowdown in traffic conversion to purchases, as consumers prioritized fuel spending over discretionary items like snacks. Prior quarters had not seen such a direct correlation between gas prices and snack sales.
No immediate market reaction was specified in the earnings call, but the commentary highlights broader consumer spending pressures linked to energy costs.