Frito-Lay in ‘good shape’ fueled by premium, says PepsiCo CEO

By Kacey Culliney

- Last updated on GMT

Related tags: Frito-lay north america, Indra nooyi

Smartfood Selects brand grew volumes by 16% for Q1, 2013 says PepsiCo CEO
Smartfood Selects brand grew volumes by 16% for Q1, 2013 says PepsiCo CEO
Frito-Lay saw strong growth for the first quarter of 2013 fueled by success in premium snack products, PepsiCo CEO said.

Net revenues at Frito-Lay North America rose 4% and market share in the US grew for the first quarter (Q1) of 2013.

Overall, PepsiCo recorded a 4% sales volume rise in is snacks with huge strength emerging markets and particularly China where snacks almost doubled (47%) in growth.

Speaking to analysts during PepsiCo’s Q1, 2013 earnings call CEO Indra Nooyi said Frito-Lay is in “good shape”.

“With our focus on the growing premium snacking occasion, we’re realizing additional growth and profitability,”​ Nooyi said.

The CEO said its popcorn and puffed snacks brand Smartfood Selects grew volumes by 16% and bagel and pita chip brand Stacy’s grew revenue by 21%.

“Both of these are premium offerings which give us additional space in the produce and deli sections of the grocery store,”​ she said.

PepsiCo launched its polarized snacks strategy in March 2012 that would focus premium and value in a bid to drive growth. For Q3 2012 it reported success in premium and said Frito-Lay’s position in the segment had “accelerated”.

C-stores and innovation

The CEO said that convenience stores continue to be a very strong go-to outlet for the Frito-Lay brands.

Hugh Johnston, chief financial officer (CFO) at PepsiCo, said the outlets were an ideal place to experiment.

“We’ve got some terrific innovation out in convenience stores right now, and that innovation obviously does really help Frito-Lay. It [Frito-Lay] is so sensitive to flavor innovation – and convenience is where you get a lot of trial on that,”​ Johnston said.

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