PepsiCo reports double-digit growth for quarter ended September 3 in India

Bottles of Pepsi are pictured at a grocery store in Pasadena, California, U.S (File image: Reuters)

Global food and beverages major PepsiCo on Wednesday reported a double-digit volume growth in India for the quarter ended September 3, when it faced challenges such as higher commodity and operating costs. The company reported a mid-single-digit growth in the convenience foods unit volume in the Indian market, said PepsiCo's earning statement.

Net revenue in the third quarter ended September 3, 2022, from the Africa, Middle East, South Asia (AMESA) division under which India comes, was up 3.66 per cent to USD 1.72 billion as against USD 1.66 billion. This is "primarily reflecting effective net pricing, partially offset by a net decline in organic volume. Unfavourable foreign exchange reduced net revenue growth by 14 percentage points," the company said in its earnings statement.

Its "operating profit declined 14 per cent, primarily reflecting a 62-percentage points impact of higher commodity costs, primarily grains and packaging materials, certain operating cost increases and higher advertising and marketing expenses," said PepsiCo. These impacts were partially offset by the effective net pricing and productivity savings, it said.

In the AMESA zone, Pepsico "convenient foods unit volume declined 2 per cent, primarily reflecting a high-single-digit decline in South Africa, partially offset by double-digit growth in the Middle East and Pakistan and mid-single-digit growth in India". Its beverage unit volume grew 11 per cent, mirroring double-digit growth in India, said Pepsico.

For 36 weeks (year-to-date), PepsiCo's convenient foods unit volume in AMESA grew 5 per cent, reflecting double-digit growth in the Middle East, India and Pakistan. The beverage unit volume grew 17 per cent, primarily mirroring double-digit growth in India during the same period.

Overall, PepsiCo's global net revenue growth for the third quarter was up 8.82 per cent to USD 21.97 billion, the company said. The company has also improved its forward guidance for 2022 and expects a growth of 12 per cent.

Commenting on the results, Chairman and CEO Ramon Laguarta said: We are very pleased with our results for the third quarter as our global business momentum remains strong. Given our year-to-date performance, we now expect our full-year organic revenue to increase 12 per cent (previously 10 per cent) and core constant currency earnings per share to increase 10 per cent (previously 8 per cent). "We are encouraged by the progress we are making on our strategic agenda, and remain committed to investing in our people, brands, supply chain, and go-to-market systems and winning in the marketplace," he said.