PepsiCo’s Q4 Earnings Report Shows Declining North American Drink and Snack Demand

PepsiCo released fourth-quarter earnings for the period that ended Dec. 28, 2024. Revenue reached $27.78 billion, with earnings per share (EPS) of $1.96 on net income of $1.5 billion. Alongside the report, the company noted weaker demand for snacks and beverages in North America.

Globally, Pepsi’s sales volume for convenient foods and beverages rose 1% during the quarter, with Africa and Asia leading the growth. Yet, consumers specifically in the U.S. shied away from snack purchases at convenience stores. Sales volume for Pepsi’s Frito-Lay brand dropped 3% in North America.

 “In 2024, the salty and savory snack categories underperformed broader packaged food, following multiple years in which these categories had outperformed packaged food,” said CEO Ramon Laguarta and CFO Jamie Caulfield in a joint statement, per CNBC.

Also hurt by less consumer spending was Pepsi’s beverage division, which reported a 3% decrease. Pepsi’s Quaker Foods brand also saw a significant downturn, falling 6% in the quarter.

Pepsi’s organic revenue growth, a measure of income adjusted for foreign currency as well as product acquisitions or divestments, hit 2% in 2024. The company expects more of the same in 2025.

What’s Ahead for PepsiCo?

With the price of groceries rising in the past couple of years, Pepsi invested in a plan to keep its products affordable. It initiated various product promotions and introduced value-added packaging, such as putting more potato chips in bags. It also poured money into its value brands Chester’s and Santitas.

Internationally, Pepsi is growing at a steady pace, and the company will continue to build on that momentum. There is still some work to do to push the North American division in an upward direction, but company leadership remains confident it can improve performance in that market.  

“We’re very confident that our North American business will accelerate this year,” said Laguarta, per AP News.

While inflation and budget-strapped consumers have taken a toll on food and beverage companies like PepsiCo, trends toward healthier lifestyles are also putting a strain on the snack segment. Generally, the company’s brands focus more on taste and less on health. Yet, the food empire’s leadership has recognized the shift and has been slowly adjusting its offerings to appeal to more health-conscious consumers.

“There’s a higher level of awareness in general of American consumers toward health and wellness,” the PepsiCo CEO explained in a conference call.