Americans are slowly losing our taste for fizzy sugar water, but PepsiCo may have overestimated how quickly that’s happening. The company admits that it spent the third quarter stuffing shelves with more “healthy” products than the public was ready for.
The Cheeto-Kombucha equation
Pepsi has been having trouble finding the right balance between healthy-ish snacks and the decidedly unhealthy options that people associate with the company’s brands, which include Pepsi, Mountain Dew, Doritos, Cheetos, and Lay’s.
Executives notably pointed out last year that they’re trying to get healthier snacks on the market, but the people of North America keep bypassing the baked kale chips and kombucha to grab Mountain Dew and Cheetos.
Pepsi’s beverage sales were down 3%, which the company blamed on pushing healthy drinks at the expense of tried-and-true sugar bombs. It also blamed a summer that was cooler on average overall for falling sales of Gatorade sports drinks.
What went wrong?
The company says that it spent money promoting its newer products, which include beverages with non-caloric sweeteners and baked snacks.
PepsiCo kicked off the year by purchasing a Super Bowl ad slot for its new bottled water brand, LIFEWTR, along with its traditional assortment of sugared beverages.
It’s not all bad news, though. Pepsi brought out a new variety of Flamin’ Hot Cheetos just in time for a trend toward “bold flavors,” and overall, higher sales in its snack division helped boost slightly dehydrated beverage sales.
To fix this problem in the future, the company plans to promote its traditional soft drink brands. It will have to keep in mind its promise to cut added sugar in beverages in the coming decade, though.