How is PepsiCo Balancing Volume Declines With Pricing Gains?

PepsiCo, Inc. PEP is navigating volume softness through a carefully orchestrated mix of strategic pricing, targeted value investments and product innovation. Facing a pressured consumer environment, particularly in its Frito-Lay North America ("FLNA") segment, the company has introduced a nuanced "dual-size" price-pack architecture. This includes lower entry price points (under $2) aimed at value-conscious shoppers and higher-value offerings for premium consumers. PEP is witnessing meaningful improvements in unit volumes where these strategies have been rolled out, especially in single-serve and multi-pack formats attached to meal deals, which are showing traction in convenience channels.Simultaneously, PepsiCo is pursuing intelligent reinvestment strategies that balance affordability with profitability. Rather than indiscriminately slashing prices, management is leveraging data and advanced tools to optimize promotions and product sizes according to income cohorts and time-of-month spending behaviors. Smaller packs and value-priced options are being prioritized to maintain consumer frequency, while operational efficiencies, such as improved field execution, SAP-driven visibility and cost-rightsizing, are being accelerated to free up funds for reinvestment.PepsiCo’s broader strategy also includes portfolio transformation and expansion into high-growth segments, especially internationally. While FLNA has seen subdued volume trends, international markets have shown resilience, helping to offset domestic pressure. The company expects mid- to high-single-digit growth from markets like India and Brazil, with incremental profitability and scale. This two-pronged approach is mitigating volume losses with pricing and strategic reinvestment. Meanwhile, leaning on international momentum positions PepsiCo to preserve margins and drive long-term sustainable growth despite near-term headwinds.PEP’s Competitors: KO & MDLZ’s Smart MovesThe Coca-Cola Company KO and Mondelez International, Inc.MDLZ are the key beverage companies competing with PepsiCo in the global arena.As PepsiCo’s primary global rival in the beverage sector, Coca-Cola competes directly across carbonated soft drinks, bottled water, juices and ready-to-drink teas. While PepsiCo has a robust food and snack division (Frito-Lay), Coca-Cola’s strength lies in its beverage-focused portfolio and dominant global brand recognition, particularly in the cola category.In the snack and convenience foods space, Mondelez is a major competitor to PepsiCo’s Frito-Lay segment. Mondelez owns popular global brands like Oreo, Ritz and Cadbury, and competes in categories such as biscuits, crackers and chocolate. Both companies vie for market share in snacking occasions and are focused on innovation, affordability and international expansion.PEP’s Price Performance, Valuation & EstimatesShares of PepsiCo have lost 11.6% year to date against the industry’s growth of 7%. Image Source: Zacks Investment Research From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 17.09X, below the industry’s average of 18.47X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for PEP’s 2025 earnings implies a year-over-year decline of 3.6%, whereas its 2026 earnings estimate suggests a year-over-year uptick of 5.3%. The estimates for 2025 and 2026 have been unchanged in the past seven days. Image Source: Zacks Investment Research PEP currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Mondelez International, Inc. (MDLZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks