PepsiCo Focuses on Healthier Snacks Amid Trump-Era Policy Changes
PepsiCo, the food and beverage behemoth behind household brands like Pepsi, Lay’s and Cheetos, isn’t usually the first company that springs to mind when it comes to healthy snacking. Now, the company is looking to change that narrative with a mix of natural ingredients, smaller portions and protein-packed options.
Shares of PepsiCo rose more than 7 percent yesterday (July 17) after the company reported $22.8 billion in revenue and a $1.3 billion profit for the second quarter, both beating analyst expectations. On paper, net income dropped 59 percent from last year due to an asset write-down related to its Rockstar and Be & Cheery brands.
The company’s health-oriented offerings, branded internally as “permissible” snacks, now generate about $2 billion in annual sales and are “becoming much more relevant in our overall mix,” CEO Ramon Laguarta told analysts during yesterday’s earnings call.
The “permissible” category includes brands like SunChips, made with whole grains; PopCorners, which are baked rather than fried; and Simply, a line free from artificial colors and flavors.
PepsiCo also plans to revamp some of its biggest names. By the end of the year, it will relaunch Lay’s and Tostitos without artificial dyes or flavors. Cheetos and Doritos are also expected to follow suit with cleaner-label versions. “That will elevate those brands,” Laguarta said.
Another pillar of PepsiCo’s strategy is portion control. About 60 percent of the company’s U.S. snack sales volume now comes from “smaller formats,” said Laguarta, who noted that that percentage is expected to grow further.
Innovation is also playing a key role in the company’s health push. PepsiCo plans to enhance products with added protein, fiber and whole grains. Protein, in particular, has become increasingly in-demand. “Consumers are adopting protein solutions in the diet at a pace that was not the case a few months back, a few years back,” Laguarta said.
A bigger shift in the snack industry
PepsiCo’s shift toward healthier options aligns with recent guidance from the Trump administration, which has championed a crackdown on artificial dyes as part of its “Make America Healthy Again” initiative.
And PepsiCo isn’t alone in the shift. Rival Coca-Cola has also jumped into the wellness trend, launching a prebiotic soda called Simply Pop earlier this year. PepsiCo made a similar move recently by acquiring Poppi, another prebiotic soda brand.
Coca-Cola could also be making a significant change to its classic formula. On July 16, President Trump announced that the company had agreed to replace high-fructose corn syrup with cane sugar in U.S. products going forward.
In a carefully worded statement, Coca-Cola responded, “We appreciate President Trump’s enthusiasm for our iconic Coca-Cola brand,” though it stopped short of confirming the change. The company did, however, note that “new innovative offerings” are on the horizon.
