PepsiCo is using pricier products to help drive up sales.

The snack and beverage maker said yesterday that revenue rose for each of its Frito-Lay North America and PepsiCo Americas Beverages units during the second quarter, despite flat volume, reported the Gulf Daily News (GDN), our sister publication.

That does not necessarily mean the company simply raised prices on bags of Lay’s chips and cans of Diet Pepsi.

During a call to discuss its quarterly earnings, PepsiCo chief executive Indra Nooyi noted the company is using “creative revenue management tactics, coupled with innovation” to boost its financial performance. That could mean newer products that are positioned as more premium products and cost more, such as its Mountain Dew Dewshine that comes in a glass bottle.

In the Frito-Lay unit, Nooyi noted that its strategy has shifted business towards “certain bag sizes” that might not result in selling more chips but could bring in more money.

Coca-Cola Company also recently said analysts shouldn’t focus on volume growth, because products like mini-cans and bottles that fetch more on a per-ounce basis could help drive sales and profit growth.

For the second quarter, PepsiCo said sales for Frito-Lay North America climbed two per cent, while PepsiCo Americas Beverages sales edged up one per cent. When stripping out the impact of foreign currency translations, revenue for both units rose three per cent.

The company’s total revenue rose 5.1 per cent, when stripping out the impact of foreign currency translations, acquisitions and divestures and structural changes. When including those factors, reported revenue declined six per cent.

Cost-cutting help keep profit on par with last year. The company said it earned $1.98 billion, or $1.33 per share, for the three months ending June 13.

Excluding one-time items, it earned $1.32 per share, topping the $1.23 Wall Street expected, according to Zacks Investment Research.

The company boosted its full-year profit forecast.

PepsiCo now expects full-year earnings per share to climb 8pc, on a constant currency basis. Its prior guidance was for a seven per cent increase. - TradeArabia News Service