Biden Defeated Snackflation.
PepsiCo is giving shoppers a break on chips after years of snackflation
Alex Bitter Oct 8, 2024, 1:37 PM EDT
https://www.businessinsider.com/pepsico-selling-bigger-bags-of-chips-after-years-food-inflation-2024-10
PepsiCo is adding chips to its packs in a bid to win over inflation-weary shoppers.
The company's snack revenue fell 1% during the third quarter, it said Tuesday.
It's the latest sign that shoppers are getting some relief after years of rising food prices.
There's finally some good news for shoppers tired of rising food prices and shrinking grocery products.
PepsiCo is adding more chips in packs without raising prices, company executives said during an earnings call on Tuesday.
Bags of Tostitos, Ruffles, and Doritos now contain 20% more chips, CEO Ramon Laguarta said on the call. PepsiCo is also adding two or three extra bags of chips to variety packs, which typically contain about a dozen small bags of chips, he said.
The company is betting that those deals will help attract shoppers back to its brands after years of "snackflation." Spiraling food prices over the past few years have led many food companies to raise prices and even sell less food for the same price — a phenomenon called "shrinkflation." Inflation has slowed down this year, but many Americans are still spending historically high percentages of their budgets on food.
Shrinkflation doesn't look as if it's been working out so well for PepsiCo lately, though. Third-quarter revenue at Frito-Lay North America, the company division that makes Doritos, Lay's, Ruffles, and other snacks, fell 1%, it said.
But the CEO said the new chip move "will be all additional value that I think will have a positive impact on the business in the coming months," especially as Americans hold watch parties for some of fall's biggest sports.
"It's the football season," Laguarta said. "There's a lot of gatherings, and those brands belong very well in those gatherings."
Executives at PepsiCo, one of the world's largest snack and beverage makers, had indicated in July that relief from higher snack prices was on the way.
"It's the football season," Laguarta said. "There's a lot of gatherings, and those brands belong very well in those gatherings."
Executives at PepsiCo, one of the world's largest snack and beverage makers, had indicated in July that relief from higher snack prices was on the way.
Even so, food prices have gained attention in Congress. On Monday, Sen. Elizabeth Warren and Rep. Madeleine Dean, both Democrats, announced that they'd written to Laguarta and the CEOs of Coca-Cola and General Mills. In the letters, Warren and Dean questioned the CEOs about their companies' profits as a result of raising prices and cutting product sizes.
Vice President Kamala Harris has said that if she's elected president, her administration will seek a federal ban on price gouging for groceries.