PepsiCo expects to raise prices again early next year

Key Points:

·         Due to supply-chain challenges, PepsiCo might have to hike prices again next year.

·         PepsiCo had recently raised prices due to rising raw material prices.

PepsiCo Inc said on Tuesday it is expecting to raise prices of snacks and beverages again early next year due to supply-chain challenges.

Chief Financial Officer Hugh Johnston said the company faced shortage of cans and Gatorade bottles in the last few months as restaurants and theatres reopened recently.

"I do expect there will probably be some price increases in the first quarter of next year as well, as we fully absorb and lock down the impact of commodity inflation," Johnston said.

Supply-chain disruptions are likely to moderate by the end of 2021, he added.

Earlier price hike

In recent weeks, PepsiCo has already raised prices of its sodas and snacks blaming the rising raw material prices. In the U.K., PepsiCo business is also suffering due to shortage of truck drivers in post-Britain.

Johnston, though, has assured that there will be no shortage of PepsiCo products and said the company will be performing better by the end of the fourth quarter.

Company’s Performance

PepsiCo expects organic revenue to rise about 8% in fiscal 2021, compared to the forecast of 6% rise, the company said.

The third-quarter organic revenue of the company rose 9%, while the costs were up over 10% due to higher spending on distribution and marketing.

Net revenue increased 11.6% to $20.19 billion in the quarter, compared to estimates of $19.39.

Shares of the company rose marginally in premarket trading.

Picture Credits: Reuters