PepsiCo, the company that makes popular snacks like Lay's and Doritos, is planning to put more chips in its bags. This change comes after a surprising drop in sales.
Many customers have been leaving these well-known snacks on the shelves instead of buying them.
PepsiCo's Chip Sales Decline
The reason behind this decline is partly due to PepsiCo's previous decision to reduce the number of chips in each bag, which they thought would help save money amid rising prices.
In a bid to tackle inflation, PepsiCo initially cut the number of chips in its bags, meaning there were fewer chips to enjoy. However, this plan backfired as customers began to turn to other brands or simply stopped buying chips altogether.
In response, the company has announced it will increase the amount of chips in its bags by 20% and will also add two more bags in its multipacks. This means snack lovers can expect to see more of their favorite chips in stores.
PepsiCo recently shared its financial report, which showed a 1% decline in revenue for Frito-Lay, its snack division. Additionally, the volume of chips sold decreased by 1.5%.
During a recent earnings call, PepsiCo CEO Ramon Laguarta explained that the fall in sales comes at a time when many people gather to watch football games and enjoy snacks. He emphasized that this is a busy season for chip sales.
Market research from Circana reveals that generic brands, or store brands, have become more popular, with sales increasing by 6%. Many shoppers are seeking better value for their money, especially with the rising prices of snacks.
PepsiCo Responds to Shrinkflation
In response to customer complaints about "shrinkflation," a term used to describe when products decrease in size while prices remain the same, PepsiCo is taking steps to provide larger servings of snacks like Doritos, Tostitos, Ruffles, and Lay's.
A spokesperson for PepsiCo mentioned that customers can look forward to finding 20% more chips in Tostitos and Ruffles "bonus" bags without any change in price.
Furthermore, the company is expanding its multipack options, moving from 18-count packs to packs with 20 smaller bags. This means families can enjoy even more snacks for the same price.
Consumer advocate Edgar Dworsky, who has been vocal about the issue of shrinkflation, expressed his approval of PepsiCo's new initiative. In the past, he noted that products like Tostitos and Ruffles had seen a reduction in size, which frustrated many snack lovers.
Despite these positive changes, some believe that PepsiCo's decision to increase the quantity of chips may not be entirely for the benefit of consumers. CNN reported that the company's snack sales had dropped by 1% in the previous quarter.
Prices for snacks have surged significantly, increasing by 36% since 2020, while the overall prices of groceries have only risen by 21%.
