PepsiCo unveils big ecommerce bet

PepsiCo has created a 200-person business unit tasked with developing online growth in the face of Amazon’s emerging presence in the supermarket industry. PepsiCo chief financial officer Hugh Johnston has said the unit has left the FMCG giant on pace to hit $1 billion in annualised ecommerce sales this year, Bloomberg reports. $1 billion in revenue would double PepsiCo’s ecommerce revenues from last year, but would still represent a small slice of its total $63 billion annual revenue. The group is reportedly focused on preparing PepsiCo’s products for online sellers such as Amazon as well as traditional brick-and-mortar grocers looking to develop their own online presence.
Meanwhile, weaker demand for Gatorade has constrained North American beverage sales for PepsiCo in the third quarter, while increasing material costs and unfavourable exchange rates have hampered growth in Asia, leading to a revision in its full-year organic revenue growth forecast. The world’s second-largest FMCG company unveiled a 1.3 per cent increase in net revenue growth for the third quarter, bringing year-to-date growth to 1.7 per cent. PepsiCo’s North American beverages business, its largest unit, decreased by 3.4 per cent to $5.3 billion after volume declined six per cent during the quarter, its first decline in two-years. Its Asia, Middle East and North Africa unit suffered from a 13 per cent decline in operating profit growth, with a 5 per cent increase in food or snack volumes being offset by a 1 per cent decline in beverages. “Overall, our businesses performed well in the third quarter in what continues to be a challenging environment,” Nooyi said.
Source: www.insidefmcg.com