Frito-Lay peddles forward to gain market share
Overall volumes for the snack titan were up 2% globally and up 3% in Europe alone. Market share in snacks for Frito-Lay North America had been negative for the previous three financial quarters.
Indra Nooyi, chairman and CEO of PepsiCo, said the Q4 performance was strong.
“Market share results have shown steady improvement and we gained savory snack value share in the fourth quarter,” she told analysts in the company’s Q4 earnings call.
Net revenues for the fourth quarter (Q4) were $4.37bn and for the full year $14.5bn - up 3% on the previous quarter and year.
Growth was far stronger than Latin America Foods which saw just a 1% improvement in net revenues for the year and a 0.5% drop for Q4; Quaker Foods North America was in decline by 2% for Q4 and the full year.
Expansion and clever marketing
Nooyi said Frito-Lay had successfully increased traction thanks to successful global product expansions.
“In snacks, we leveraged our global scale by lifting and shifting successful new products like Doritos Jacked and Deep Ridged chips from the United States into a number of international markets.”
Similarly, marketing programs like ‘Doritos Crash the Superbowl’ and ‘Lays Do Us A Flavor’ had generated plenty of attention.
“Programs like these drive phenomenal consumer engagement, are highly complementary to our broader marketing efforts and are extremely financially efficient.” Nooyi said.
The superbowl campaign, for example, received almost 5,000 consumer submissions from 29 countries and the Lays flavor program garnered more than 14 million submissions.
“Our investments are translating to tangible results with solid improvement in brand equity scores and market share performance in our priority markets for our global brands.”
Europe especially strong
Nooyi acknowledged that developed European markets were particularly strong for the snack business, as well as beverages.
“The Europe team is executing well – there is good innovation,” she said. However, she noted products had to be slightly skewed towards alternative consumer needs – for example, there were plenty of baked snack offerings in Europe.
Overall, PepsiCo pulled in net revenues of $19.9bn for Q4 – down 1% on the previous quarter – and full year net revenues sat at $66.6bn.
