PepsiCo's challenges are sector-wide issue in snack industry

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Pepsico News

Nick,Consumer Staples

PepsiCo's (PEP) mixed second quarter earnings have left investors underwhelmed, with results showing a decline in some of the company's snack segments. RBC...

, with results showing a decline in some of the company's snack segments. RBC Capital Markets managing director Nik Modi joins Market Domination to discuss his outlook on the snacking industry.

Um I think partly due to economic pressure, especially with low income consumers that tend to over index to this category.This is a problem for the entire snacking industry and quite frankly, the entire packaged food industry is, is under a lot of pressure to, to your point about read throughs as we get through this earnings season.

There's not just price cuts that, you know, there's other alternatives you can offer smaller pack sizes that are lower priced, you can offer innovation that might add a benefit, uh which consumers are willing to pay up for. I mean, you look it, inflation, you know, going up 30% for these products uh over the last few years uh takes its toll.

Um And so let's get to what you do like Nick uh still within your coverage and in particular beverages, I find it really interesting that you highlight constellation brands as one of your pick because that's one as you point out in your most recent note that investors really haven't believed in.Um This company has been able to deliver exactly what they've said in their beer business going back the last 10 years.

When you think about a Red Bull or a Coca Cola, like the monster brand has shown that it can transcend category and country.And they haven't even gained significant traction yet.

 

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