Linflation remains high, amplified by the war in Ukraine, and could well have unintended consequences. According to the American business media CNBCthe PepsiCo group – notably distributing the drink of the same name – has planned to reduce the size of its products in the coming months to cope with higher production costs. “We are facing inflation like everyone else, and we think it will persist for a while, but our income is sufficient to be able to manage inflation, we are much more focused on how to reduce the cost of the company,” said Hugh Johnston, chief financial officer of PepsiCo, on the American channel.
In one year, the group’s net profit has shrunk by nearly a billion euros. On Tuesday July 12, the group announced that it had made a net profit of 1.43 billion dollars in the second quarter of 2022, compared to 2.36 in the same period in 2021. In question, in particular, a manufacturing and raw materials which cost more. Faced with this observation, the group would therefore seek to optimize its costs. One of the avenues would be, in particular, to manufacture smaller products. According to the CEO, Ramon Laguarta, an increase in the selling price is completely ruled out by the group to date.
Beyond inflation – which the whole world is experiencing – Pepsico has been directly affected by the war in Ukraine. Indeed, according to its latest financial statement, in the quarter affected by the conflict in Ukraine, Pepsico says it lost $1.17 billion. And for good reason, the day after Vladimir Putin declared war, the distributor announced that it was suspending all its sales on Russian territory, except for basic necessities, such as infant formula. From now on, the rival group of Coca-Cola seeks to get rid of its interests in Russia, concerning in particular Russian brands of fruit juices and dairy products.
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