Is PepsiCo cutting the prices of its snacks by 15 per cent? That means its profit margins were too high (like many manufacturers)

The PepsiCo case confirms what was already known: many major brands have inflated their prices and margins in recent years. Not least because a 15 per cent drop suggests they had plenty of ‘room for manoeuvre’. PepsiCo was the world’s second-largest food producer in 2023, behind Nestlé and ahead of the Brazilian meat producer JBS.

JBS: skyrocketing meat prices in the US amid use of anti-obesity drugs and increasing protein consumption

The anti-obesity molecule revolution is challenging the model of the industry giants, which could lose up to USD 90 billion in the US by 2031. As a result, multinationals are trying to switch to Europe and a more protein-rich offer. And US restaurants – given the level of meat inflation – are struggling and reducing staff and portions of their dishes

Quick Take — Historic change: Supermarkets lead volume growth, overtaking Discounts

“From 2019 to 2023, their [the discounters’] turnover grew at an average annual rate of 9.3 per cent, compared to 5.7 per cent for the other operators”(we reported this here). Then there was aturnaround: the growth in volume of the hyper and super channel exceeded (2.5%) that of the discounters (1.3%) . E-commerce was very good at 8.4% (see first table below).

Circana data show how, after 9.1% in 2023, value sales grew more slowly in 2024 ( 2.4%) to consolidate in 2025 with a further 3.7%.

The significant novelty is that, unlike the previous two-year period, growth is no longer just an effect of prices, but is accompanied by a recovery in real demand: volumes, in fact, declining by 0.5% in 2023, turn positive in 2024 ( 1.8%) and accelerate in 2025 ( 2.3%). Supporting this rebalancing is also the dynamics of prices, which after a 9.5% surge in 2023, stop at 0.6% in 2024 and travel at 1.4% in 2025, returning to physiological levels.

Below: one of the factors in the recovery of the Iper Super channel (in which there are also superstores) was probably the strength of the private label, which expressed convenience, and which is beating the leading brands (such as Barilla or Coca-Cola, to give examples, see the second table). A comparison between the different channels – hyper/super/superstore ‘versus’ discounters – on prices is unfortunately not possible to date.

p.s.: looking at the ISTAT data, the drop in volumes highlighted a few days ago, seems to affect only small retailers, not the GD (page 3).

Note that ISTAT has only been using barcodes since 2020 and that not all retailers use them.

Compiled 7 September, updated 8 September 2025

Quick Take — Temu: sales up, profits down

Revenues of PDD – the holding company that controls Temu – rose 7% to 103.98 billion yuan ($14.53 billion) during the quarter ended June, beating analysts’ estimate of 103.34 billion yuan, according to data compiled by LSEG.

Its operating profit fell 21%. Adjusted earnings per US depository share stood at 22.07 yuan, beating the estimate of 15.74 yuan.

Competition from Amazon is very strong. Temu is testing the sale of food – under an advertisement for the sale of Coca-Cola on its site – in Italy.