Pepsi’s profits fizz up on smaller portion sizes

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Mini snacks bags and mini sodas are the latest trend in snacking.
Ramon Laguarta, CEO of the company, stated that mini-cans of full sugar products and small-format snacks are performing well. What’s the reason? “Portion control,”

To stay competitive, PepsiCo (PEP) has been removing sugar and trans fats from its products. The trend towards healthy eating is evident in the demand for small packages.

Lately, consumers are gravitating toward sugar-free drinks and baked snacks rather than fried or sugar-heavy foods. If you just can’t wait any longer, the mini size of your favorite item is here for you.

Image Source – KVIA

Aside from mindful consumption, companies like PepsiCo also offer different package sizes to appeal to a larger base of customers, many of whom live within their many brands. Size-wise, the collection offers something for just about everyone, from heads of large households to impulse shoppers at gas stations to parents packing school lunches every day.

According to Duane Stanford, editor of Beverage Digest, smaller packs sizes are becoming increasingly important for companies to appeal to customers. “If you do it right, it’s definitely a win.”

Portable snacks at a low price

Another advantage for the company: Customers tend to buy up to 50% more per ounce in smaller sizes than in larger ones – sometimes significantly more. In an attempt to get back to their old routines, some people are turning to snacks and sodas that are easily portable, regardless of cost.

After the pandemic, people returned to their normal busy lives and opted for convenience and were choosing grab-and-go products, Claire Lancaster, head of food and drink at WGSN, a trend forecasting company, said.

The decreasing demand for bigger items could be due to the public moving towards all-day snacking rather than only eating three sit-down meals.

With larger sizes of an item, consumers get more bang for their buck, but they’re still spending more dollars. That might not be feasible for all buyers, especially as inflation soars.

Therefore, people on a tight budget may buy a small snack even if they can’t afford a bigger package. And as prices rise, “consumers choose options that are within their means,” Lancaster said.

Pack sizes and prices in line with the market economy will help keep customers coming back, says Antonio Laguarta, who reminds consumers of sticking with the product. Consumers that can only afford to buy a small snack today may well be able to upgrade to more expensive purchases tomorrow, agree business-minded individuals such as Dr. John Stanford.

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