The Future of Junk Food Could Be Healthy Food
The boldest move a struggling packaged food company could make right now is taking the leap from preservatives to the farm.
A few weeks ago, PepsiCo Inc.—the biggest maker of grocery store food in the US—reported its quarterly earnings. To put it bluntly: They were not good. After several years of price hikes, consumers are buying less of PepsiCo’s food and beverages, which include Lay’s potato chips, Doritos and Mountain Dew. The drop was especially acute in the North America, with volumes down in both drinks and salty snacks. Sure, dollar sales were up slightly, but in these inflation-ridden times it’s sales volume that says more about the health of a business.
Chief Executive Officer Ramon Laguarta blamed struggling American shoppers, whom he’ll try to woo back with discounts and ads. “There is clearly a consumer that is more challenged, and it’s a consumer that is telling us that in particular parts of our portfolio, they want more value,” he said on the July 11 call. But maybe value these days isn’t just about cost—it’s about quality, too. Large swaths of the packaged food industry are seeing the same thing: People are buying less junk.