PepsiCo is “putting all the urgency of the business” into improving the performance of soft drinks, the company’s CEO said in an earnings call last week, with plans to increase investment in brands including Mountain Dew and newly acquired Poppi.
CEO Ramon Laguarta said he doesn’t “feel good” about the company’s beverage business, particularly soda. Despite gains in energy and hydration categories, North American beverage volumes were down 2% during the quarter.
“We’re not competing well in soft drinks,” Laguarta said.
To combat declines in soft drinks, PepsiCo is planning to invest more behind its namesake soda, Poppi and Mountain Dew. It also wants to improve execution through its team and bottling partners.
Laguarta said the company plans to make cost cuts across the business and in some cases raise prices to fund investments and take advantage of opportunities in functional ingredients and other trending areas.
PepsiCo announced at NACS it will bring more functional elements to Poppi, which already has prebiotics for gut health. The company will launch an energy-boosting drink called Poppi Lift with 70 milligrams of caffeine, plus added Vitamin B3 and electrolytes. It is expected to launch in March in Peach Ring and Strawberry Lollipop flavors.
PepsiCo is also planning a series of flavor innovations across its soda brands including a new Pepsi Strawberry Shortcake, which combines the classic flavors of Pepsi with strawberry, cake and vanilla cream. It’s also launching a new Mountain Dew Baja Blast called Berry Sol, which has notes of lime and guava and Dirty Dawg, a dirty soda-inspired Mug Root Beer.
The beverage giant will also continue to invest in its hydration portfolio, which Laguarta said was one of key priorities for the year. In 2027, it is launching Gatorlyte Longer Lasting, which has the highest amount of electrolytes in the Gatorade portfolio. PepsiCo’s hydration division saw growth in volume and net revenue.
