PepsiCo spurred on by healthier drinks

By staff reporter

- Last updated on GMT

Related tags: Pepsico

PepsiCo's new wave of healthier soft drinks, including Gatorade and
Aquafina, helped the group to shrug off declines in its trademark
Pepsi cola to increase sales by 13 per cent in the third quarter.

Newly appointed PepsiCo chief executive, Indra Nooyi, the first woman to head the firm, said the results were even more pleasing given the strong comparable sales rise in the third quarter last year.

The announcement continues one of Pepsi's most successful business periods, led by a new wave of healthier, non-carbonated soft drinks.

In North America, sports drink Gatorade saw a surge in demand this summer, building on a year of rapid growth, while Aquafina water, Propel fitness water and Lipton ready-to-drink teas also performed strongly.

Sugary, fizzy drinks still make up a large part of PepsiCo's drinks business, but their influence has waned in recent times.

Nowhere was this clearer in PepsiCo's third quarter than with its trademark Pepsi cola drink. The brand was one of the biggest weights pulling back better growth in PepsiCo's third quarter sales, the firm said.

More positive performances from the Mountain Dew and Sierra Mist labels were not enough to salvage fizzy drink sales, which slipped two per cent in total.

There were mid-single- digit gains for fizzy drinks in PepsiCo's international business, although this was mainly down to emerging market growth.

PepsiCo's operating profit rose six per cent in the quarter, down on the nine per cent growth for the first half of the year. The slow-down is a sign that cost pressures continue to lurk, despite Nooyi increasing full year earnings predictions.

Rising costs for oranges, a key ingredient in the group's popular Tropicana juice brand, and higher distribution costs for Gatorade this summer sent operating profits down by four per cent in North America.

Related topics: PepsiCo

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