PepsiCo CEO: ‘Our e-commerce business is now approximately $1bn in annualized retail sales’

By Elaine Watson

- Last updated on GMT

Amazon customers can re-order multiple PepsiCo products - including LIFEWTR, Gatorade and Mtn Dew - at the click of an Amazon dash button
Amazon customers can re-order multiple PepsiCo products - including LIFEWTR, Gatorade and Mtn Dew - at the click of an Amazon dash button

Related tags Pepsico Indra nooyi

While it’s “not perfectly clear” whether all e-commerce channels are going to make money, PepsiCo is positioning itself to win online with heavy investments that leverage big data and predictive analytics to sharpen real-time marketing messages, dynamic merchandising and tailored offers, said CEO Indra Nooyi during the firm’s Q4 earnings call on Tuesday.

E-commerce sales had experienced “exceptional growth​” in 2017, said Nooyi, while Wells Fargo analysts noted that, “Over the longer-term, we think PepsiCo is perhaps better positioned relative to its beverage peers to adapt to the e-commerce world given the large portion of its sales from snacks, which by nature of their weight and volume, are vastly easier to ship than beverages.”

Nooyi added: “We're increasingly collaborating with retail customers to make e-commerce a point of differentiation for PepsiCo. As a result, our e-commerce business is now approximately $1bn in annualized retail sales, and we are well-positioned to capitalize on what is sure to be a dynamic future in this space.

We are watching what kinds of products are being sold, what are people buying through e-commerce and what are people buying through brick-and-mortar. And more importantly, we're looking to see whether brick-and-mortar stores are really becoming the warehouse to pick for e-commerce, which breathes more life into them.

“So, this is an evolving story... And the outlook is not perfectly clear because the economics of many of these new digital channels is still being thought through. It's not perfectly clear that they're all going to make money.”

Internationally, she said, “China I think, is at the cutting edge of digital sales in the grocery channel. We are seeing Europe now grow in terms of e-commerce and the hard discounters taking a much bigger presence there. And we're seeing the same thing in Latin America.”

‘We were late to the flavored sparkling water category…’

In the North American beverages segment, PepsiCo is continuing to innovate in faster-growing segments of the market, including “water in all its forms… still, flavored sparkling, electrolytic waters, sports hydration, they're all growing categories,​” she said.


And I'll be honest with you. I think we were late to the flavored sparkling water category. I wish we had launched bubly​ a couple of years ago. But the fact of the matter is we have a very good distribution system. Our customer relationships are excellent, and our customers are very, very happy we're launching bubly. The product tastes fantastic, and in a lot of the testing, it is winning versus competition.”

Wells Fargo: ‘Disappointed’ by PepsiCo’s US channel data for beverages

While analysts at Wells Fargo said they were encouraged by PepsiCo’s plans for 2018 – including the launch of the Pepsi Generations campaign, the launch of Mountain Dew Ice, the introduction of new sparkling flavored water brand bubly, and marketing plans for LIFEWTR, they were “disappointed by PepsiCo’s US channel data and concerned by negative commentary from our retail contacts about its innovation pipeline and operations​.”

According to convenience store retailers quizzed by Wells Fargo as part of its quarterly ‘Beverage Buzz Survey,' several operators felt that Gatorade was “losing relevance​” while its focus on “new age/healthy soda didn’t seem to pay off,​” despite strong sales of LIFEWTR.

Q4 figures

In the fourth quarter of 2017, Pepsi's net revenues were flat vs the same period a year ago at of $19.53bn.

Organic revenue, which excludes the impacts of foreign exchange and other changes, grew by 2.3%, primarily driven by higher demand for food/snacks in the Asia, Middle East and North Africa (AMENA), Europe Sub-Saharan Africa (ESSA), Latin America and Frito-Lay North America (FLNA) segments, offsetting weaker results in North America Beverages (NAB), where volumes were down 2% year-on-year.

PepsiCo reported a net loss of $710m in Q4 owing to a one-time $2.5bn provisional net tax expense, but expects a lower overall effective tax rate for 2018, said CFO Hugh Johnston.

Related news

Show more

Related products

show more



Content provided by Icon Foods | 24-Jan-2024 | White Paper

Good afternoon fellow food manufacturers, formulators, and enthusiasts of Clean Label Sugar Reduction. You know, in the past, we’ve seen our fair share...

Tagatose—a sweet way to reduce calories.

Tagatose—a sweet way to reduce calories.

Content provided by ASR Group | 18-Oct-2023 | Application Note

Introducing Tagatose - an excellent alternative to high potency sweeteners and sugar alcohols. Tagatose is a rare sugar that’s 90% as sweet as sucrose...

Related suppliers

Follow us


View more