PepsiCo delivered 2.6% in net revenue growth for Q3, an acceleration versus the previous quarter due to a mixture of organic growth within its North America beverage business, an improvement in global convenient foods organic volume trends, and recent M&A activity.
This includes the acquisition of poppi, Siete and Sabra; a new agreement with Celsius including the transfer of ownership of the Rockstar Energy brand in the US and Canada; and the transition away from case pack water in North America.
Its EMEA division saw strong performance, with revenue up by 5.5% for the quarter. Its North American beverage business is also up, rising by 2%. However, its North American food division and International Beverages Franchise took a hit, both witnessing a 3% dip in revenue.
The group’s organic revenue grew by 1.3% for Q3 and PepsiCo expects to continue seeing low-single digit increases for 2025.
A plan to accelerate growth
To accelerate organic revenue growth, the food and drink giant plans to elevate its innovation pipeline, focusing on functional product offerings.
It will focus on fuelling its core portfolio, removing artificial colours and flavours, providing simpler ingredients, and adding in more protein, fibre and whole grains.
PepsiCo intends to expand the distribution and reach of poppi – its soda brand with prebiotics which has delivered consistently strong results, with year to-date estimated retail sales of $525 million. This is an increase of more than 50% versus prior year.
It will also look to accelerate its efforts ‘beyond the bottle’ in sports nutrition, with tablets and enhancers under the Gatorade and Propel brands.
The business has also announced plans to further sharpen its price pack architecture to provide ‘good everyday value’ across its most popular brands and pack sizes; expand its presence and reach in the away-from-home and digital channels; and continue to build its scale and presence in international markets.
Strategy to reduce costs
Structural initiatives to modernise its company and reduce costs include:
- Optimising SKUs and reducing complexity
- Expanding automation at its plants, warehouses and distribution centres
- Right sizing its manufacturing, warehousing, and distribution assets and labour
- Waste reduction through its value chain
- Standardising and simplifying its ways of working across processes, capabilities and services.
PepsiCo’s new CFO
The Q3 results come at the same time as PepsiCo announces a new chief financial officer, with Jamie Caulfield set to retire next year after 30 years with the business.
Steve Schmitt will assume the role of executive vice president and CFO on 10 November 2025, whilst Caulfield steps into an advisory role to help with the transition until 15 May 2026.
Schmitt joins PepsiCo from Walmart US, where he currently serves as executive vice president and CFO. Here he oversees the finance function for Walmart’s multi-billion-dollar omni-channel US organisation and leading the core financial activities of Walmart’s largest business unit.
He joined Walmart in 2016 and served in multiple leadership positions within its e-Commerce, Club, and mass businesses. He played an important role in the transformation of Walmart into an omnichannel retailer enabled by digital transformation and led cost discipline initiatives.
Previously, Schmitt held a variety of roles at Yum! Brands, where he developed deep expertise in QSR and the away-from-home business and evaluated long-term strategies for the company, including strategic opportunities to support growth. He began his career with UPS, spending more than a decade with the company.
“Steve has a strong track record of proven results and brings critical expertise that aligns with PepsiCo’s growth strategy,” said Ramon Laguarta, chairman and CEO, PepsiCo.
“Steve’s experience working with complex supply chains, adapting to the dynamic retail landscape and omnichannel consumers, and delivering operational excellence on a large scale will be impactful at PepsiCo. He will play a crucial role as we accelerate growth, optimise our cost structure, and create greater value for our shareholders.”
Laguarta also paid tribute to Caulifeld, thanking him for his three decades of service: “Jamie has played an important role in guiding our business through significant periods of change and growth and we are grateful for his contributions throughout his tenure, and I look forward to continuing to work with Jamie until his retirement next year.”
