PepsiCo aims to raise prices on steady demand

PepsiCo Inc said on Tuesday it planned "modest" price hikes next year as demand held up despite multiple increases that prompted the snacks and beverages giant to raise its 2023 profit forecast for a third straight time, reports Reuters.

PepsiCo, which owns brands including Mirinda, and Gatorade, kicks off quarterly earnings from consumer goods firms against the backdrop of rising concerns that multiple price hikes could crimp demand, as well as countries like France pushing for price cuts to help rein in inflation.

"As we get into next year there will be some modest level of price increases coming," Chief Financial Officer Hugh Johnston told Reuters in an interview.

Average prices jumped 11% in the quarter ended Sept. 9, while organic volume slipped 2.5%.

The profit margin gives PepsiCo the room to either keep the prices the same or maybe even reduce them but clearly in the short term the company has not gotten to that point where it feels the need to reduce prices drastically, said Brian Mulberry, client portfolio manager at Zacks Investment Management. Zacks has a 1% stake in PepsiCo.