- THE MAGAZINE
- CATEGORY FOCUS
- BEVERAGE R&D
Purchase, N.Y.-based PepsiCo announced that its organic net revenue for the second quarter of 2013 increased 4.2 percent to $16.8 billion, with volume of its beverages increasing 1.5 percent organically. Structural changes, principally the refranchising of the company’s beverage operations in Vietnam and China, negatively impacted its reported net revenue increase of 2 percent by nearly 1 percentage point, and foreign exchange translation had a 1.5-percentage-point unfavorable impact in the quarter, it stated.
In the United States, the company’s largest market, both volume and value market share performance improved in liquid refreshment beverages, the company notes.
PepsiCo Americas Beverages (PAB) division’s core constant currency operating profit grew 4 percent in the quarter reflecting 3 percentage points of effective net pricing and productivity gains. Reported operating profit was up 5 percent. However, organic revenue declined 1 percent in the quarter reflecting organic volume that declined 3.5 percent offset by effective net pricing of 3 percentage points. Latin America beverage volume declined less than 1 percentage point. In North America, non-carbonated beverage volume declined low single digits, and carbonated soft drink volume declined mid-range single digits.
“We’re pleased with our performance in the second quarter and for the first half of 2013,” said PepsiCo Chairman and Chief Executive Officer Indra Nooyi in a statement. “PepsiCo delivered another quarter of mid-single-digit organic revenue growth, driven by our balanced food and beverage product portfolio and global geographic footprint. We continue to invest in advertising and marketing, innovation, and other marketplace initiatives to sustain our organic revenue growth, and we are driving a robust productivity agenda that serves as a funding source for these investments.”
The impact of structural changes, principally beverage refranchisings, is expected to reduce organic revenue growth by approximately 1 percentage point for the full year. Foreign exchange translation is expected to have an unfavorable impact of approximately 1 percentage point on the company’s full-year net revenue growth. Excluding these impacts, organic revenue is expected to grow mid-range single digits this year, consistent with the company’s long-term targets.