PepsiCo Accelerates Global Growth with Strategic Turnaround in US Foods Business
PepsiCo has reported a strong second quarter for 2026, with the company's Chairman and CEO Ramon Laguarta highlighting the success of its strategic turnaround in the US foods business. In an earnings call on July 9th, Laguarta revealed that PepsiCo had achieved almost 7% revenue growth in the first half of the year, driven by 3% global volume growth in foods and 2% in beverages - the fastest growth since 2022.
Laguarta attributed this success to two key pillars: affordability investments and growth on the permissible part of the portfolio, particularly portion control. The company had invested heavily in making its products more affordable for consumers, resulting in a turnaround from negative volume growth to positive growth in the US foods business. This strategic intent was set early in the year when PepsiCo decided to lower prices to gain share in volume.
However, Laguarta also emphasized that optimizing return on investment is crucial in the second half of the year, particularly in pricing investments across different channels and customers. CFO Steve Schmitt echoed this sentiment, underscoring the importance of refining pricing strategies for future growth.
The company's performance was driven by its ability to navigate inflationary pressures and consumer behavior changes. Laguarta noted that rising inflation had impacted US consumers, but with gas prices decreasing globally, consumer behavior has shown signs of improvement. The international business continued to perform strongly, growing 7% in the second quarter.
PepsiCo's focus on strategic affordability investments, permissible product growth, and portion control seems to be paying off as the company gears up for a potential acceleration towards the higher end of its organic sales range in the back half of the year. The strong performance in the US foods business, driven by these strategies, provides a promising outlook for PepsiCo's continued growth.
