Cheaper Doritos and Lays helps PepsiCo win back struggling snackers

Cutting the cost of Doritos and Lays crisps helped PepsiCo win back snackers after a backlash over rising prices.

The food and drinks giant said on Thursday sales had jumped 8.5% in the first three months of the year to $19.4bn (£14.4bn).

It followed a series of price cuts ahead of the Super Bowl, some worth as much as 15%, on products including Doritos, Lays (known as Walkers in the UK), Tostitos and Cheetos.

PepsiCo chief executive and chairman Ramon Laguarta said the "affordability initiatives" had helped improve the firm's performance.

The company had been struggling after angering customers with a series of price hikes in response to its own soaring costs in 2022.

To win back snackers, it launched its latest wave of price cuts to coincide with the Super Bowl on 8 February, one of the most lucrative days of the year for snack makers.

As well as a jump in sales, the company on Thursday said operating profit rose by a quarter to $3.2bn.

PepsiCo's shares jumped by 2% in early trading on the results.

The boost also comes as PepsiCo grapples with the rising use of appetite-suppressing weight-loss jabs, which are driving changes in eating habits and portion sizes.

As well as focusing on affordability, Laguarta has previously said PepsiCo was also "betting a lot on portion control".

Many users have reported that their spending on food decreased considerably after starting the jab, as they felt a lot less hungry.

The snack giant is turning its focus increasingly to multipacks as customers prioritise portion control. More than 70% of its food products in the US are single-serve.

Danni Hewson, head of financial analysis at investment platform AJ Bell, said PepsiCo had to work hard to win back customers after previous price hikes.

"Affordability has become more and more important to a US consumer under pressure from all sides and branded snacks are one of those nice-to-haves that can easily be replaced or removed from shopping baskets altogether," she said.

Hewson added that the company still had "work to do" to bring down costs for consumers.

Laguarta is also pinning his hopes on PepsiCo's sponsorship of this summer's World Cup, being hosted in the US, Mexico and Canada.

It will launch "fan of the match" promotions for its Lays crisps brand during the tournament.