PepsiCo Q4 2025 PepsiCo Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 PepsiCo Inc Earnings Call
Speaker #1: Good morning, and welcome to PepsiCo's 2025 fourth quarter earnings question and answer session. Your lines have been placed on listen-only until it's your turn to ask a question.
Operator: Good morning, and welcome to PepsiCo's Q4 2025 earnings question and answer session. Your lines have been placed on listen only until it's your turn to ask a question. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. Mr. Pamnani, you may begin.
Operator: Good morning, and welcome to PepsiCo's Q4 2025 earnings question and answer session. Your lines have been placed on listen only until it's your turn to ask a question. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. Mr. Pamnani, you may begin.
Speaker #1: Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations.
Speaker #1: Mr. Pamnani, you may
Speaker #1: begin. Thank you, Kevin, and good
Ravi Pamnani: Thank you, Kevin, and good morning, everyone. I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, 3 February 2026, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to our Q4 2025 earnings release and 2025 Form 10-K, available on PepsiCo.com, for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements.
Ravi Pamnani: Thank you, Kevin, and good morning, everyone. I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, 3 February 2026, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to our Q4 2025 earnings release and 2025 Form 10-K, available on PepsiCo.com, for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements.
Speaker #2: Good morning, everyone. I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website.
Speaker #2: Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook.
Speaker #2: Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, February 3, 2026, and we are under no obligation to update.
Speaker #2: to non-GAAP measures, which When discussing our results, we refer exclude certain items from reported results. Please refer to our fourth quarter 2025 earnings release and 2025 Form 10-K available on PEPSICO.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results including a discussion of factors that could cause actual results to materially differ from forward-looking statements.
Speaker #2: Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's Executive Vice President and CFO, Steve Schmidt. We ask that you please limit yourself to one question.
Ravi Pamnani: Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's Executive Vice President and CFO, Steve Schmitt. We ask that you please limit yourself to one question. With that, I will turn it over to the operator for the first question.
Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's Executive Vice President and CFO, Steve Schmitt. We ask that you please limit yourself to one question. With that, I will turn it over to the operator for the first question.
Speaker #2: And with that, I will turn it over to the operator for the first question.
Speaker #3: Thank you. In order to ask a question and make a comment, please press star followed by 11 on your touch-tone phone at any time.
Operator: Thank you. In order to ask a question or make a comment, please press star followed by one one on your touchtone phone at any time. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Bonnie Herzog with Goldman Sachs. Your line is open.
Operator: Thank you. In order to ask a question or make a comment, please press star followed by one one on your touchtone phone at any time. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Bonnie Herzog with Goldman Sachs. Your line is open.
Speaker #3: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Bonnie Herzog with Goldman Sachs; her line is open.
Speaker #4: Thank you and good morning, everyone.
Bonnie Herzog: Thank you, and good morning, everyone. I, I had a question this morning on PFMA. You did announce that you're gonna be accelerating your increased affordability initiatives this year during the first half. So I guess, you know, hoping for a little more color on this strategy, you know, what's been working? And then, you know, how much lower, you know, will your average price points, you know, fall? And then you did mention productivity savings will help fund these commercial plans, and I guess in the context of this, you expect PFMA op margins to expand this year. So if you could touch on how, you know, you'll ultimately balance growth and profitability for that business, that would be helpful. Thanks.
Bonnie Herzog: Thank you, and good morning, everyone. I, I had a question this morning on PFMA. You did announce that you're gonna be accelerating your increased affordability initiatives this year during the first half. So I guess, you know, hoping for a little more color on this strategy, you know, what's been working? And then, you know, how much lower, you know, will your average price points, you know, fall? And then you did mention productivity savings will help fund these commercial plans, and I guess in the context of this, you expect PFMA op margins to expand this year. So if you could touch on how, you know, you'll ultimately balance growth and profitability for that business, that would be helpful. Thanks.
Speaker #5: Hi, I had a question this morning on PFMA. You did announce that you're going to be accelerating your increased affordability initiatives this year during the first half.
Speaker #5: So I guess, you know, hoping for a little more color on this strategy. You know, what's been working? And then, you know, how much lower will your average price points, you know, fall?
Speaker #5: And then you did mention productivity things will help fund these commercial plans. And I guess in the context of this, you expect PFMA op margins to expand this year.
Speaker #5: So if you could touch on how, you know, you'll ultimately balance growth and profitability for that business, that would be helpful. Thanks.
Steve Schmitt: Hey, Bonnie, good morning. It's Steve. Maybe I'll take a stab at it, and let Ramon comment a little further. In regards to your question on the investments we're making in PFNA, I'd say there's three points. First, and most importantly, we're playing offense here. And second, we're excited about the initiative and the benefits that'll come both in volume and sales growth. And third, from an overall perspective, this investment's manageable for the business. It's included in our guidance and our productivity progress, as you mentioned, certainly that's gonna help fund the initiatives that we have. So we're really fortunate. You saw the productivity that we had in the fourth quarter. We expect a lot of that to carry over.
Steve Schmitt: Hey, Bonnie, good morning. It's Steve. Maybe I'll take a stab at it, and let Ramon comment a little further. In regards to your question on the investments we're making in PFNA, I'd say there's three points. First, and most importantly, we're playing offense here. And second, we're excited about the initiative and the benefits that'll come both in volume and sales growth. And third, from an overall perspective, this investment's manageable for the business. It's included in our guidance and our productivity progress, as you mentioned, certainly that's gonna help fund the initiatives that we have. So we're really fortunate. You saw the productivity that we had in the Q4. We expect a lot of that to carry over.
Speaker #2: Bonnie, good It's Steve. Maybe I'll take a stab at it and let Ramon comment a little further. In regards to your question on the investments we're making in PFMA, I'd say there's three points.
Speaker #2: First, and most importantly, we're playing offense here. We're in second; we're excited about the initiative and the benefits that'll come both in volume and sales growth.
Speaker #2: And third, from an overall perspective, this investment's manageable for the business. It's included in our guidance and our productivity progress, as you mentioned. Certainly, that's going to help fund the initiatives that we have.
Speaker #2: So we're really fortunate. You saw the productivity that we had in the fourth quarter. We expect a lot of that to carry over. That's going to fund some of our investments.
Steve Schmitt: That's gonna fund some of our investments, and we'll be balanced about how we use that productivity, to invest in the business and drive sales growth.
That's gonna fund some of our investments, and we'll be balanced about how we use that productivity, to invest in the business and drive sales growth.
Speaker #2: And we'll be balanced about how we use that productivity to invest in the business and drive sales growth.
Speaker #3: Yeah, Bonnie, maybe I can give a bit more color. This is part of a multi-vector strategy to drive category growth and then, obviously, our participation in the category.
Ramon Laguarta: ... Yeah, Bonnie, maybe I can give a bit more color. This is part of a multi-vector strategy to drive category growth and then obviously, our participation in the category. And this is something we've been working on since Q2 or so of last year, testing at scale in some of our key markets. We think that for some consumers, low and middle income consumers, the biggest friction they have today in our category for faster penetration is affordability. So we have been testing multiple ways to give them affordability. So this will be a very surgical, very focused on particular brands, particular formats, particular channels, investment. And from the test that we've done at scale in multiple markets, this has very good ROI for us.
Ramon Laguarta: ... Yeah, Bonnie, maybe I can give a bit more color. This is part of a multi-vector strategy to drive category growth and then obviously, our participation in the category. And this is something we've been working on since Q2 or so of last year, testing at scale in some of our key markets. We think that for some consumers, low and middle income consumers, the biggest friction they have today in our category for faster penetration is affordability. So we have been testing multiple ways to give them affordability. So this will be a very surgical, very focused on particular brands, particular formats, particular channels, investment. And from the test that we've done at scale in multiple markets, this has very good ROI for us.
Speaker #3: And this is something we've been working on since Q2 or so of last year, testing at scale in some of our key markets.
Speaker #3: I think that for some, we consumers—low and middle-income consumers—the biggest friction they have today in our category for faster penetration is affordability. So we have been testing multiple ways to give them affordability.
Speaker #3: So this will be a very surgical, very focused investment on particular brands, particular formats, and particular channels. And from the tests that we've done at scale in multiple markets, this has very good ROI for us.
Speaker #3: You should be thinking this on top of space gains—big space gains—that we're getting through the partnership with our customers because of these investments in price. We're also investing, as we said in our prepared remarks, a lot on innovation, especially to provide more functionality, simpler ingredients, and to restage some of our larger brands.
Ramon Laguarta: You should be thinking this on top of space gains, big space gains that we're getting through the partnership with our customers, because of these investments in price. We're also investing, as we said on our prepared remarks, a lot on innovation, especially to provide more functionality, simpler ingredients, restage some of our larger brands. So it's a comprehensive investment plan funded through the productivities, the right sizing with it, in Frito and other productivity opportunities we took, at the global level to reinvest in the acceleration of the category, managing the category for the long term, and making sure that we participate at a higher level in this category that is starting to grow. And we feel very good about how these different interventions will continue to drive accelerated growth in the balance of the year.
You should be thinking this on top of space gains, big space gains that we're getting through the partnership with our customers, because of these investments in price. We're also investing, as we said on our prepared remarks, a lot on innovation, especially to provide more functionality, simpler ingredients, restage some of our larger brands. So it's a comprehensive investment plan funded through the productivities, the right sizing with it, in Frito and other productivity opportunities we took, at the global level to reinvest in the acceleration of the category, managing the category for the long term, and making sure that we participate at a higher level in this category that is starting to grow. And we feel very good about how these different interventions will continue to drive accelerated growth in the balance of the year.
Speaker #3: So it's a comprehensive investment plan funded through the productivities, the right sizing with it, in freedom, and other productivity opportunities we took at the global level to reinvest in the acceleration of the category, managing the category for the long term, and making sure that we participate at a higher level in this category that is starting to grow and we feel very good about how these different interventions will continue to drive accelerated growth in the balance of the
Speaker #3: So, it's a comprehensive investment plan funded through the productivities, the right-sizing with it, in freedom, and other productivity opportunities we took at the global level to reinvest in the acceleration of the category, managing the category for the long term, and making sure that we participate at a higher level in this category that is starting to grow. We feel very good about how these different interventions will continue to drive accelerated growth in the balance of the year.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Andrew Texiera with JP Morgan. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Andrea Teixeira with J.P. Morgan. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Andrea Teixeira with J.P. Morgan. Your line is open.
Speaker #6: Thank you and good morning, everyone. So I was hoping to, if you can comment further on the pricing reinvestment you just alluded to. There was a news article that talked about as much as 15% in some of the PFMA items, right?
Andrea Teixeira: Thank you, and good morning, everyone. So I was hoping to, if you can comment further on the pricing reinvestment you just alluded to. There was a news article that talked about as much as 15% in some of the FnA items, right? So, and you're doing the restaging. So I was hoping to see if you are- what are your tools to be able to mitigate that in the first half, or should we expect that to be a tough first half relative to what you just posted in PC and FnA? And then, related to that, it talks, I mean, obviously, you're also restaging Gatorade. So I was hoping to see if you can comment on the volume trajectory.
Andrea Teixeira: Thank you, and good morning, everyone. So I was hoping to, if you can comment further on the pricing reinvestment you just alluded to. There was a news article that talked about as much as 15% in some of the FnA items, right? So, and you're doing the restaging. So I was hoping to see if you are- what are your tools to be able to mitigate that in the first half, or should we expect that to be a tough first half relative to what you just posted in PC and FnA? And then, related to that, it talks, I mean, obviously, you're also restaging Gatorade. So I was hoping to see if you can comment on the volume trajectory.
Speaker #6: So I'm — and you're doing the restaging. So I was hoping to see if you were — what are your tools to be able to mitigate that in the first half?
Speaker #6: Or should we expect that to be a tough first half, relative to what you just posted in PC and PFMA? And then, related to that, it talks—I mean, obviously you're also restaging Gatorade.
Speaker #6: So I was hoping to see if you can comment on the volume trajectory. You have an easier comp for PB&A as you go into the as you go into the first half in particular the second quarter.
Andrea Teixeira: You have an easier comp for PB&A, as you go into the first half, in particular, the second quarter. So if you can talk about, like, how we should be expecting the cadence of your guidance, that would be super helpful. Thank you.
You have an easier comp for PB&A, as you go into the first half, in particular, the Q2. So if you can talk about, like, how we should be expecting the cadence of your guidance, that would be super helpful. Thank you.
Speaker #6: So if you can talk about how we should be expecting the cadence of your guidance, that would be super helpful. Thank you.
Speaker #2: Okay, Andrea. Let's step back for a minute. We expect Frito to grow volume, net revenue, and operating margin this year, so that should be the framework that we operate in.
Ramon Laguarta: Okay, Andrea, let's step back for a minute. We expect Frito-Lay to grow volume, net revenue, and operating margin this year. So that should be the framework that we operate in. Now, this growth will come early in the year, okay? So we expect volume growth and net revenue growth to come early in the year. The way you should think about the pricing investments, and the article obviously talks about the maximum. As I said earlier, it will be very surgical investment, in particular, consumers, brands, channels, where we see that the biggest friction for higher frequency is price, and that's the way we've tested and the way it will go. Now, you should think about a combination of some price investment.
Ramon Laguarta: Okay, Andrea, let's step back for a minute. We expect Frito-Lay to grow volume, net revenue, and operating margin this year. So that should be the framework that we operate in. Now, this growth will come early in the year, okay? So we expect volume growth and net revenue growth to come early in the year. The way you should think about the pricing investments, and the article obviously talks about the maximum. As I said earlier, it will be very surgical investment, in particular, consumers, brands, channels, where we see that the biggest friction for higher frequency is price, and that's the way we've tested and the way it will go. Now, you should think about a combination of some price investment.
Speaker #2: Now, this growth will come early in the year, okay? So, we expect volume growth and net revenue growth to come early in the year.
Speaker #2: The way you should think about the pricing investments—and the article obviously talks about the maximum. As I said earlier, it will be very surgical investment in particular consumers, brands, channels where we see that the biggest friction for higher frequency is price.
Speaker #2: And that's the way we've tested, and the way we'll go. Now, you should think about a combination of some price investments—not all of it is, obviously, net revenue from PepsiCo—and large space gains.
Ramon Laguarta: Not all, not all of it is obviously net revenue from PepsiCo and a large, space gains. Just to give you a number, the average, space gain for Frito-Lay in the new, resets of the, you know, both the main aisle and the perimeter will be, double-digit. So we'll be growing double-digit space in Frito-Lay from the March, April timeframe, when most of our partners start, you know, changing their layout. So this is a good return for us and, a great return for the category as well. This category needs to grow. It's very relevant for our partners, it's relevant for us.
Not all, not all of it is obviously net revenue from PepsiCo and a large, space gains. Just to give you a number, the average, space gain for Frito-Lay in the new, resets of the, you know, both the main aisle and the perimeter will be, double-digit. So we'll be growing double-digit space in Frito-Lay from the March, April timeframe, when most of our partners start, you know, changing their layout. So this is a good return for us and, a great return for the category as well. This category needs to grow. It's very relevant for our partners, it's relevant for us.
Speaker #2: Just to give you a number, the average space gain for freedom in the new resets of both the main aisle and the perimeter will be double-digit.
Speaker #2: So we'll be growing double-digit space in Freedom from the March–April timeframe, when most of our partners start changing their layout. So this is a good return for us.
Speaker #2: And a great return for the category as well. And this category needs to grow. It's very relevant for our partners. It's
Speaker #2: relevant for us. And one
Steve Schmitt: And one other thing, Andrea, on, excuse me, you asked to think about the cadence of the quarters. We talked about, in our guidance from a sales growth standpoint, that we expected sales to strengthen in the second half as more of our initiatives are put in place and gain traction, as well as we have Poppi and some other acquisitions from prior year moving into organic growth. From an EPS perspective, we think the year will be pretty balanced from a first half, second half standpoint, and we'll certainly update you as the year progresses.
Steve Schmitt: And one other thing, Andrea, on, excuse me, you asked to think about the cadence of the quarters. We talked about, in our guidance from a sales growth standpoint, that we expected sales to strengthen in the H2 as more of our initiatives are put in place and gain traction, as well as we have Poppi and some other acquisitions from prior year moving into organic growth. From an EPS perspective, we think the year will be pretty balanced from a H1, H2 standpoint, and we'll certainly update you as the year progresses.
Speaker #7: Other thing, Andrea, on 'excuse me,' you asked to think about the cadence of the quarters. We talked about, in our guidance from a sales growth standpoint, that we expected sales to strengthen in the second half as more of our initiatives are put in place and gain traction, as well as we have Poppy and some other acquisitions from prior years moving into organic growth.
Speaker #7: From an EPS perspective, we think the year will be pretty balanced from a first half, second half standpoint, and we'll certainly update you as the year progresses.
Speaker #7: From an EPS perspective, we think the year will be pretty balanced from a first half, second half standpoint, and we'll certainly update you as the year progresses.
Speaker #1: Thank you.
Operator: Thank you. One moment for our next-
Operator: Thank you. One moment for our next-
Speaker #1: One moment for you. Yeah, maybe if—
Ramon Laguarta: Sorry, if I can add, Andrea, we're also restaging two big brands. We're restaging Gatorade, and we're restaging Quaker. We're starting the year with Lay's and Tostitos. Those are, you know, multibillion dollar brands for us. And then later in the year, we're gonna have big relaunches of Gatorade and Quaker, two big brands, obviously, for us that are more on the sweet spot of growth of the categories.
Speaker #3: I can—sorry, if I can add, Andrea, we're also restaging two big brands. We're restaging Gatorade, and we're restaging Quaker. We're starting the year with Lay's and Tostitos.
Ramon Laguarta: Sorry, if I can add, Andrea, we're also restaging two big brands. We're restaging Gatorade, and we're restaging Quaker. We're starting the year with Lay's and Tostitos. Those are, you know, multibillion dollar brands for us. And then later in the year, we're gonna have big relaunches of Gatorade and Quaker, two big brands, obviously, for us that are more on the sweet spot of growth of the categories.
Speaker #3: Those are multi-billion-dollar brands for us. And then, later in the year, we're going to have big relaunches of Gatorade and Quaker—two big, big brands, obviously, for us that are more in the sweet spot of growth of the categories.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Daryl Cheney with Morgan Stanley. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Dara Mohsenian with Morgan Stanley. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Dara Mohsenian with Morgan Stanley. Your line is open.
Speaker #8: Hey, good morning. I was just hoping for a little more detail on the focus on affordability and the price investments. Just, A, is that more focused on specific packages, brands?
Dara Mohsenian: Hey, good morning.
Dara Mohsenian: Hey, good morning.
Ramon Laguarta: Hey there.
Ramon Laguarta: Hey there.
Dara Mohsenian: I was just hoping for a little more detail on the focus on affordability and the price investments. Just, A, is that more focused on specific packages, brands? Can you just give us a little more detail in terms of how you're thinking about that? And then, B, you know, there is some evidence, right? There's some retailers where you've taken actions already, as we look back to last year and the last few months of the year. So maybe just help us understand what level of payback you saw there. Are you seeing volume pick up more than the price investments? Is it close to the price investments? How do you sort of think about the forward outlook there relative to what you've seen so far, understanding that it'll be more aggressive actions in 2026?
Dara Mohsenian: I was just hoping for a little more detail on the focus on affordability and the price investments. Just, A, is that more focused on specific packages, brands? Can you just give us a little more detail in terms of how you're thinking about that? And then, B, you know, there is some evidence, right? There's some retailers where you've taken actions already, as we look back to last year and the last few months of the year. So maybe just help us understand what level of payback you saw there. Are you seeing volume pick up more than the price investments? Is it close to the price investments? How do you sort of think about the forward outlook there relative to what you've seen so far, understanding that it'll be more aggressive actions in 2026?
Speaker #8: Can you just give us a little more detail in terms of how you're thinking about that? And then, B, there is some evidence, right?
Speaker #8: There's some retailers where you've taken actions already, as we look back to last year and the last few months of the year. So maybe just help us understand what level of payback you saw there.
Speaker #8: Are you seeing volume pick up more than the price investments? Is it close to the price investments? How do you sort of think about the forward outlook there relative to what you've seen so far?
Speaker #8: Understanding that it will be more aggressive actions in '26.
Speaker #2: Yeah, there are. So, as I mentioned, it is very surgical. This is well-tested at scale. Obviously, we're executing. It means that we got very good ROI from those investments.
Ramon Laguarta: Yeah, there are. So as I mentioned, it is very surgical. This is, well tested at scale. Obviously, we're executing. It means that we got very good ROI from those investments. Volume return is pretty good, and that's what the category needs, units and volume to go up. This not only has a good impact in the consumer, obviously being part of our business and being part of our brands, but as you can imagine, once we've right-sized Frito-Lay, as we have, the flow through of additional volume has a lot of good leverage for us. So you should think about all these components, and we'll update you more as, you know, as we get more data in coming quarters. We're very optimistic, and, you know, we started the year in a good place.
Ramon Laguarta: Yeah, there are. So as I mentioned, it is very surgical. This is, well tested at scale. Obviously, we're executing. It means that we got very good ROI from those investments. Volume return is pretty good, and that's what the category needs, units and volume to go up. This not only has a good impact in the consumer, obviously being part of our business and being part of our brands, but as you can imagine, once we've right-sized Frito-Lay, as we have, the flow through of additional volume has a lot of good leverage for us. So you should think about all these components, and we'll update you more as, you know, as we get more data in coming quarters. We're very optimistic, and, you know, we started the year in a good place.
Speaker #2: Volume return is pretty good, and that's what the category needs. You need some volume to go up. This not only has a good impact on the consumer, obviously being part of our business and being part of our brands, but as you can imagine, once we've right-sized Freedom as we have, the flow-through of additional volume has a lot of good leverage for us.
Speaker #2: So you should think about all these components and we'll update you more as we get more data in coming quarters. We're very optimistic and we started the year in a good
Speaker #2: place. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open.
Speaker #1: One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open.
Speaker #9: Great. Thanks. Good morning. We had quickly just had the time to go through the bits of the 10K before the call started. And notice that advertising was down like it was double-digits, like 500 million dollars in 2025.
Lauren Lieberman: Great, thanks. Good morning. We had quickly just had the time to go through the 10-K before the call started, and noticed that advertising was down, like, you know, it was double digits, like $500 million in 2025. So just curious about, you know, what drove that thought for 2026. You know, whether advertising would go up, but that was sort of a bigger decline than I would have expected to see for 2025, and I'd love to hear more about it. Thanks.
Lauren Lieberman: Great, thanks. Good morning. We had quickly just had the time to go through the 10-K before the call started, and noticed that advertising was down, like, you know, it was double digits, like $500 million in 2025. So just curious about, you know, what drove that thought for 2026. You know, whether advertising would go up, but that was sort of a bigger decline than I would have expected to see for 2025, and I'd love to hear more about it. Thanks.
Speaker #9: So, just curious about what drove that thought for '26. Whether I would just think advertising would go up, but that was sort of a bigger decline than I would have expected to see for 2025.
Speaker #9: And I'd love to hear more about it. Thanks.
Speaker #2: Hey, Lauren and Steve. Thanks for your question. You're right. It did go down this year. We did get some efficiency from both the working and non-working advertising line.
Steve Schmitt: Hey, Lauren, it's Steve. Thanks for your question. You're right, it did go down this year. We did get some efficiency from both the working and non-working advertising line, and your assumption that it should go up next year is a good one, too. That's a benefit from just a cost of sales standpoint that we did get in 2025, that we would expect not to get that same benefit. So we're gonna be very growth-minded. We're gonna be making sure our messaging comes through from a value and innovation standpoint, and so we'll be investing in the sales growth for this year.
Steve Schmitt: Hey, Lauren, it's Steve. Thanks for your question. You're right, it did go down this year. We did get some efficiency from both the working and non-working advertising line, and your assumption that it should go up next year is a good one, too. That's a benefit from just a cost of sales standpoint that we did get in 2025, that we would expect not to get that same benefit. So we're gonna be very growth-minded. We're gonna be making sure our messaging comes through from a value and innovation standpoint, and so we'll be investing in the sales growth for this year.
Speaker #2: And your assumption that it should go up next year is a good one too. That's a benefit, just from a cost of sales standpoint, that we did get in 2025 that we would expect not to get that same benefit.
Speaker #2: So we're going to be very growth-minded. We're going to be making sure our messaging comes through from a value and innovation standpoint. And so we'll be investing in the sales growth for this.
Speaker #2: year. Thank
Operator: Thank you. One moment for our next question. Our next question comes from Filippo Falorni with Citi. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Filippo Falorni with Citi. Your line is open.
Speaker #1: You. One moment for our next question. Our next question comes from Philip Ofoloni with Citi. Your line is open.
Filippo Falorni: Hi, good morning, everyone. I wanted to ask on the guidance for organic sales for 2026. You mentioned that in the second half of the year, you expect to be at the higher end of the full year guidance range. Can you walk us through, like, the drivers of the acceleration throughout the year? Because, Ramon, you mentioned before, you're expecting PFNA to return already to volume growth earlier in the year. So is it further acceleration in PFNA or maybe some acceleration in the other two segments, PBNA and International? Maybe you, you can comment on the expectations for the other two segments as well. Thank you.
Filippo Falorni: Hi, good morning, everyone. I wanted to ask on the guidance for organic sales for 2026. You mentioned that in the H2 of the year, you expect to be at the higher end of the full year guidance range. Can you walk us through, like, the drivers of the acceleration throughout the year? Because, Ramon, you mentioned before, you're expecting PFNA to return already to volume growth earlier in the year. So is it further acceleration in PFNA or maybe some acceleration in the other two segments, PBNA and International? Maybe you, you can comment on the expectations for the other two segments as well. Thank you.
Speaker #8: Hi, good morning, everyone. I wanted to ask about the guidance for organic sales. For '26, you mentioned that in the second half of the year, you expect to be at the higher end of the full-year guidance range.
Speaker #8: Can you walk us through the drivers of the acceleration throughout the year? Because, Ramon, you mentioned before you're expecting PF&A to return already to volume growth earlier in the year.
Speaker #8: So is it further acceleration in PF&A, or maybe some acceleration in the other two segments, PB&A and International? Maybe you can comment on the expectations for the other two segments as well.
Speaker #8: Thank
Speaker #8: you. Yeah,
Ramon Laguarta: Yeah, Filippo, hi. Yeah, I think the way you should think about the year is we expect our international business to continue to perform at similar levels to last year, mid-single-digit. We're seeing good performance in some of our larger markets, Mexico improving in the Q4, and then also having a good start. China as well, South Africa as well. But, you know, you should think about mid-single-digit growth for our international business. That's the way it has been performing for the last 19 quarters or so. And the acceleration comes mostly from our North America businesses, where on the beverage side, we feel good about the acceleration it's had in 2024, in 2025, and we think that it will continue.
Ramon Laguarta: Yeah, Filippo, hi. Yeah, I think the way you should think about the year is we expect our international business to continue to perform at similar levels to last year, mid-single-digit. We're seeing good performance in some of our larger markets, Mexico improving in the Q4, and then also having a good start. China as well, South Africa as well. But, you know, you should think about mid-single-digit growth for our international business. That's the way it has been performing for the last 19 quarters or so. And the acceleration comes mostly from our North America businesses, where on the beverage side, we feel good about the acceleration it's had in 2024, in 2025, and we think that it will continue.
Speaker #2: Filippo, hi. Yeah, I think the way you should think about the year is we expect our international business to continue to perform at similar levels to last year—mid-single digit. We're seeing good performance in some of our larger markets, Mexico improving in Q4, and then also having a good start.
Speaker #2: China as well. South Africa as well. But you should think about mid-single-digit growth for our international business. That's the way it has been performing for the last 19 quarters or so.
Speaker #2: So, there. And the acceleration comes mostly from our North America businesses. On the beverage side, we feel good about the acceleration it's had in '24 and '25.
Speaker #2: And we think that it will continue. So you should expect a little bit more acceleration from the beverage business. But clearly, it is our food business that has been improving throughout the year both volume and net revenue.
Ramon Laguarta: So you should expect a little bit more acceleration from the beverage business, but clearly it is our food business that has been improving throughout the year, both volume and net revenue, and December was better than October, and we expect that obviously, Q1 will be better than Q4, and so on. So that is the way we're thinking about the year. And then you have some sort of a mechanical acceleration in organic from some of the acquisitions we made earlier in the year. They turn into organic throughout the year. That will have also a some mechanical impact. But those acquisitions are very are in high growth segments of the category. That's why we did it. They've been integrated very well into our distribution systems, and we're getting additional return on those brands.
So you should expect a little bit more acceleration from the beverage business, but clearly it is our food business that has been improving throughout the year, both volume and net revenue, and December was better than October, and we expect that obviously, Q1 will be better than Q4, and so on. So that is the way we're thinking about the year. And then you have some sort of a mechanical acceleration in organic from some of the acquisitions we made earlier in the year. They turn into organic throughout the year. That will have also a some mechanical impact. But those acquisitions are very are in high growth segments of the category. That's why we did it. They've been integrated very well into our distribution systems, and we're getting additional return on those brands.
Speaker #2: And December was better than October. And we expect that, obviously, Q1 will be better than Q4 and so on. So that is the way we're thinking about the year.
Speaker #2: And then you have some sort of a mechanical acceleration in organic from some of the acquisitions we made earlier in the year. They turn into organic throughout the year.
Speaker #2: That will also have some mechanical impact. But those acquisitions are in very high-growth segments of the category. That's why we did it.
Speaker #2: They've been integrated very well into our distribution systems. And we're getting additional return on those brands. So they'll continue to grow. And they will be an acceleration of the portfolio in the second half.
Ramon Laguarta: So they'll continue to grow, and there will be an acceleration of the portfolio in the second half. So those are the main buckets of growth and how you should be thinking about the acceleration in the second half.
So they'll continue to grow, and there will be an acceleration of the portfolio in the H2. So those are the main buckets of growth and how you should be thinking about the acceleration in the second half.
Speaker #2: So those are the main buckets of growth, and how you should be thinking about the acceleration in the second.
Speaker #2: half. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open.
Speaker #1: One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open.
Speaker #1: open. Great.
Peter Grom: ... Great. Thank you. Good morning, everyone. So, Ramon, you outlined a lot of innovation in the prepared remarks and talked about some of the success you've seen with Naked and Pepsi prebiotic. So granted, it's still very, very early, but can you just talk about what you are learning or seeing from the innovation and how that informs your view on the path forward in North America? Thanks.
Peter Grom: ... Great. Thank you. Good morning, everyone. So, Ramon, you outlined a lot of innovation in the prepared remarks and talked about some of the success you've seen with Naked and Pepsi prebiotic. So granted, it's still very, very early, but can you just talk about what you are learning or seeing from the innovation and how that informs your view on the path forward in North America? Thanks.
Speaker #3: Thank you. Good morning, everyone. So Ramon, you outlined a lot of innovation in the prepare remarks and talked about some of the success you've seen with Naked and Pepsi prebiotics.
Speaker #3: So granted, it's still very, very early, but can you just talk about what you are learning or seeing from the innovation and how that informs your view on the path forward in North America?
Speaker #3: Thanks.
Speaker #2: Yeah, this is a great question. And obviously, we're thinking about growth in two main dimensions. One is making sure that our core brands continue to grow.
Ramon Laguarta: Yeah, it's a great question, and obviously, we're, we're thinking about growth in two main dimensions. One is making sure that our core brands continue to grow, and that's why we're investing meaningful effort from the organization and dollars to restage some of our larger brands. So if you think about the effort to relaunch Lay's globally, we did it with Pepsi two years ago. We're still getting, very good returns on that investment. Now, we're relaunching Lay's globally with a new reposition- a new positioning, you will see for the Super Bowl, based on freshness, based on farmers, simple ingredients, no artificials. We know that that is going to, bring consumers to the brand. We're relaunching Tostitos, and as I mentioned, we're relaunching Gatorade, and we're relaunching Quaker. So big brands that need to continue to, drive the machine.
Ramon Laguarta: Yeah, it's a great question, and obviously, we're, we're thinking about growth in two main dimensions. One is making sure that our core brands continue to grow, and that's why we're investing meaningful effort from the organization and dollars to restage some of our larger brands. So if you think about the effort to relaunch Lay's globally, we did it with Pepsi two years ago. We're still getting, very good returns on that investment. Now, we're relaunching Lay's globally with a new reposition- a new positioning, you will see for the Super Bowl, based on freshness, based on farmers, simple ingredients, no artificials. We know that that is going to, bring consumers to the brand. We're relaunching Tostitos, and as I mentioned, we're relaunching Gatorade, and we're relaunching Quaker. So big brands that need to continue to, drive the machine.
Speaker #2: And that's why we're investing meaningful effort from the organization and dollars to restate some of our larger brands. So if you think about the effort to relaunch Lay's globally, we did it with Pepsi two years ago.
Speaker #2: We're still getting a very good return from that investment. Now, we're relaunching Lay's globally with a new repositioning you will see for the Super Bowl, based on freshness, based on farmers, simple ingredients, no artificials.
Speaker #2: We know that that is going to bring consumers to the brand. We're relaunching Tostitos. And as I mentioned, we're relaunching Gatorade, and we're relaunching Quaker.
Speaker #2: So big brands that need to continue to drive the machine. And then we're innovating in the periphery of the category where we're seeing growth.
Ramon Laguarta: And then we're innovating in the periphery of the category where we're seeing growth. And, you know, just to give you some examples, Naked was a good innovation for us, is going to be a permanent innovation for us. And what it taught us is that there are consumers out there that are looking for us to give them excuses to come into the category. And these are mainly younger households, moms that are love our products, but they want it, in this case, the case of Naked, like, no artificials. So, now the actual claim is, now I can give my children my favorites because it has no artificials.
And then we're innovating in the periphery of the category where we're seeing growth. And, you know, just to give you some examples, Naked was a good innovation for us, is going to be a permanent innovation for us. And what it taught us is that there are consumers out there that are looking for us to give them excuses to come into the category. And these are mainly younger households, moms that are love our products, but they want it, in this case, the case of Naked, like, no artificials. So, now the actual claim is, now I can give my children my favorites because it has no artificials.
Speaker #2: And just to give you some examples, Naked was a good innovation for us, is going to be a permanent innovation for us. And what it taught us is that there are consumers out there that are looking for us to give them excuses to come into the category.
Speaker #2: And these are mainly younger, households, moms that are love our products, but they want it in this case, the case of Naked, like no artificials.
Speaker #2: So now the actual claim is, now I can give my children my favorites because it has no artificials. So we're thinking about innovation from a category building point of view, bringing more consumers into the category, and obviously driving frequency of the category as I discussed earlier with the affordability investments.
Ramon Laguarta: So we're thinking about innovation from a category building point of view, bringing more consumers into the category, and obviously driving frequency of the category, as I discussed earlier with the affordability investments. The same in beverages. We're seeing the consumers willing to come into the category, we give them the right products. One of the big innovations we have in the plan for next year, for this year is Gatorade, low sugar, no artificials. Within this is going to be from the conversation with our customers, the space, the allocation, et cetera. It's gonna be a big, big, big innovation for us. Again, probably the same consumer looking for reasons to come into some of our large brands.
So we're thinking about innovation from a category building point of view, bringing more consumers into the category, and obviously driving frequency of the category, as I discussed earlier with the affordability investments. The same in beverages. We're seeing the consumers willing to come into the category, we give them the right products. One of the big innovations we have in the plan for next year, for this year is Gatorade, low sugar, no artificials. Within this is going to be from the conversation with our customers, the space, the allocation, et cetera. It's gonna be a big, big, big innovation for us. Again, probably the same consumer looking for reasons to come into some of our large brands.
Speaker #2: The same in beverages. We're seeing the consumers willing to come into the category. If we give them the right products, our big one of the big innovations we have in the plan for next year for this year is Gatorade, low sugar, no artificials.
Speaker #2: Within this, it's going to be from the conversation with our customers, the space, the allocation, etc. It's going to be a big innovation for us.
Speaker #2: Again, probably the same consumer looking for reasons to come into some of our large brands. We're very keen on some of the fiber innovation; we're very keen on some of the innovation with protein.
Ramon Laguarta: We're very keen on some of the fiber innovation. We're very keen on some of the innovation with protein. We are betting a lot on portion control. I think portion control is also a very big lever to keep consumers in the category and increase our frequency. So our multipack, both in foods and beverages, is going to be a very critical lever for us to grow. And I think we're getting better, more insightful, more granular in the combinations, the price points, and the different occasions where those packs can participate, and we know that they're driving category growth, and they're driving penetration of our brands.
We're very keen on some of the fiber innovation. We're very keen on some of the innovation with protein. We are betting a lot on portion control. I think portion control is also a very big lever to keep consumers in the category and increase our frequency. So our multipack, both in foods and beverages, is going to be a very critical lever for us to grow. And I think we're getting better, more insightful, more granular in the combinations, the price points, and the different occasions where those packs can participate, and we know that they're driving category growth, and they're driving penetration of our brands.
Speaker #2: We are betting a lot on portion control. I think portion control is also a very big lever to keep consumers in the category and increase our frequency.
Speaker #2: So our multi-pack, both in foods and beverages, is going to be a very critical lever for us to grow. And I think we're getting better, more insightful, more granular in the combinations and the price points and the different occasions.
Speaker #2: Where those packs can participate and we know that they're driving category growth and they're driving penetration of our brands.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Kevin Grundy with BNP Paribas. Your line is
Operator: Thank you. One moment for our next question. Our next question comes from Kevin Grundy with BNP Paribas. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Kevin Grundy with BNP Paribas. Your line is open.
Speaker #3: Great. Good morning, everyone. Ramon, just picking up on that your comment a moment ago on healthier innovations, but I wanted to drill down specifically on GLP-1 adoption.
Kevin Grundy: Great. Good morning, everyone. Ramon, just picking up on that, your comment a moment ago on healthier innovations, but I want to drill down specifically on GLP-1 adoption, because it comes up a decent amount in terms of the pushback on what may keep certain investors out of your stock. So naturally, there remains a lot of concern. You have old tablets in the market, more insurance plans picking up weight loss drugs, et cetera. Can you... Not to be redundant, Ramon, with your comments from a moment ago, but maybe just address this GLP-1 concern head on. Were you able to address this in the test markets where you had success with the innovation you're rolling out and the price investment?
Kevin Grundy: Great. Good morning, everyone. Ramon, just picking up on that, your comment a moment ago on healthier innovations, but I want to drill down specifically on GLP-1 adoption, because it comes up a decent amount in terms of the pushback on what may keep certain investors out of your stock. So naturally, there remains a lot of concern. You have old tablets in the market, more insurance plans picking up weight loss drugs, et cetera. Can you... Not to be redundant, Ramon, with your comments from a moment ago, but maybe just address this GLP-1 concern head on. Were you able to address this in the test markets where you had success with the innovation you're rolling out and the price investment?
Speaker #3: Because it comes up a decent amount in terms of the pushback on what may keep certain investors out of your stock. So naturally, there remains a lot of concern.
Speaker #3: You have old tablets hitting the market, more insurance plans picking up weight loss drugs, etc. Can you—and not to be redundant, Ramon, with your comments from a moment ago—but maybe just address this GLP-1 concern head-on?
Speaker #3: Were you able to address this in the test markets where you had success with the innovation you're rolling out and the price investment? And do you feel like PepsiCo has a good handle on what higher adoption rates may look like in terms of implications for the category and for your outlook?
Kevin Grundy: Do you feel like PepsiCo has a good handle on what higher adoption rates may look like in terms of implications for the category and for your outlook? Your thoughts there would be appreciated. Thank you.
Do you feel like PepsiCo has a good handle on what higher adoption rates may look like in terms of implications for the category and for your outlook? Your thoughts there would be appreciated. Thank you.
Speaker #3: So your thoughts there would be
Speaker #3: appreciated. Thank you.
Speaker #2: Yeah,
Ramon Laguarta: Yeah, I think, I think we should. We should assume that there will be a broader adoption of GLP-1 medicines, you know, as you know, as those options evolve, and they, they're more affordable. So I think that should be an assumption now. We are reacting; we have been working on this for some time. There are multiple levers that we're using, and we're very optimistic on how PepsiCo can play in that new reality with the consumer. I think there are more opportunities than threats, but there are both. The way we're reacting is multiple. One, we believe portion control, and we've tested it, and we see that families with GLP, they continue to engage in our category, but they do it in smaller portions.
Ramon Laguarta: Yeah, I think, I think we should. We should assume that there will be a broader adoption of GLP-1 medicines, you know, as you know, as those options evolve, and they, they're more affordable. So I think that should be an assumption now. We are reacting; we have been working on this for some time. There are multiple levers that we're using, and we're very optimistic on how PepsiCo can play in that new reality with the consumer. I think there are more opportunities than threats, but there are both. The way we're reacting is multiple. One, we believe portion control, and we've tested it, and we see that families with GLP, they continue to engage in our category, but they do it in smaller portions.
Speaker #2: I think we should. We should assume that there will be a broader adoption of GLP-1 medicines, as those options evolve and there are more affordable.
Speaker #2: So, I think that should be an assumption now. We are reacting. We have been working on this for some time. There are multiple levers that we're using, and we're very optimistic on how PepsiCo can play in that new reality with the consumer.
Speaker #2: I think there are more opportunities than threats, but there are both. The way we're reacting is multiple. One, we believe portion control and we've tested and we see that families will GLP; they continue to engage in our category, but they do it in smaller portions.
Speaker #2: So, the way to keep the category relevant is through smaller portions. If you think about our portfolio in the U.S., 70% plus of our food business is already in single-serve.
Ramon Laguarta: So the way to keep the category relevant is through smaller portions. If you think about our portfolio in the US, 70%+ of our food business is already in single serve, right? So we're investing in single serve capacity. We continue to provide consumer solutions for 1 ounce, 1.5 ounces, small portions that they can be through the consumer's life. Now, there are big opportunities for us, if you think about consumer habits when consumers are in GLP medication. The one is hydration. Big idea for us, big opportunities. We're relaunching Gatorade. Propel is growing 20+, powders, tablets, more functionality along with hydration, big idea. Fiber, we know those consumers are looking for fiber. They have some digestive, you know, problems.
So the way to keep the category relevant is through smaller portions. If you think about our portfolio in the US, 70%+ of our food business is already in single serve, right? So we're investing in single serve capacity. We continue to provide consumer solutions for 1 ounce, 1.5 ounces, small portions that they can be through the consumer's life. Now, there are big opportunities for us, if you think about consumer habits when consumers are in GLP medication. The one is hydration. Big idea for us, big opportunities. We're relaunching Gatorade. Propel is growing 20+, powders, tablets, more functionality along with hydration, big idea. Fiber, we know those consumers are looking for fiber. They have some digestive, you know, problems.
Speaker #2: Right? So we're investing in single-serve capacity. We continue to provide consumer solutions for one ounce, one and a half ounces—small portions that they can be through the consumer's life.
Speaker #2: Now, there are big opportunities for us if you think about consumer habits when consumers are on GLP medication. The one is hydration—big idea for us, big opportunities.
Speaker #2: We're relaunching Gatorade, propel is growing 20 plus. Powder is tablets, more functionality along with hydration, big idea. Fiber, we know those consumers are looking for fiber.
Speaker #2: They have some digestive problems. We can provide; we are innovating around fiber, whole grains. That's a big space. We're relaunching Quaker. Quaker will put emphasis on that space, but not only that, sun chips, and some of our food products as well.
Ramon Laguarta: We can provide, we are innovating around fiber, whole grains. That's a big space. We're relaunching Quaker. Quaker will put emphasis on that space, but not only that, SunChips, and some of our food products as well. Protein, obviously, that's an area where, you know, we've been innovating for some time, and we'll continue to do it. We're working on cooking methods, so our consumers like baked, they like pop. We're working on air frying. We're working on different technologies to make sure our products are cooked in a way that is more closer to what the consumers will prefer. So multiple vectors of transformation that we'll be sequencing with a sense of urgency.
We can provide, we are innovating around fiber, whole grains. That's a big space. We're relaunching Quaker. Quaker will put emphasis on that space, but not only that, SunChips, and some of our food products as well. Protein, obviously, that's an area where, you know, we've been innovating for some time, and we'll continue to do it. We're working on cooking methods, so our consumers like baked, they like pop. We're working on air frying. We're working on different technologies to make sure our products are cooked in a way that is more closer to what the consumers will prefer. So multiple vectors of transformation that we'll be sequencing with a sense of urgency.
Speaker #2: Protein, obviously, that's an area where we've been innovating for some time, and we'll continue to do it. We're working on cooking methods, so consumers like baked, they like pop.
Speaker #2: We're working on air frying. We're working on different technologies to make sure our products are cooked in a way that is more closer to what the consumers will prefer.
Speaker #2: So, multiple vectors of transformation. That will be sequencing with a sense of urgency; we did last year, we continue to do this year. But I think this could turn into an opportunity for us, and that's how we're approaching it, in the US, but not only the US.
Ramon Laguarta: We did last year, we continue to do this year, but I think this could turn into an opportunity for us, and that's how we're approaching it, in the US, but not only the US. This is going to be an opportunity for us in multiple markets.
We did last year, we continue to do this year, but I think this could turn into an opportunity for us, and that's how we're approaching it, in the US, but not only the US. This is going to be an opportunity for us in multiple markets.
Speaker #2: This is going to be an opportunity for us in multiple markets.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Camille Gargiuolo with Jefferies. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Kaumil Gajrawala with Jefferies. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Kaumil Gajrawala with Jefferies. Your line is open.
Kaumil Gajrawala: Hey, everyone. Good morning. I guess the big news and congratulations is the double-digit shelf space gains that you talked about earlier. Can you maybe just give some more details? Where is it coming from? You know, when you go through a typical grocer, Frito-Lay has quite a bit of shelf space already. So is this, you know, within the salty snacks aisle? Is it incremental shelf space, maybe in other parts of the store? Just any more details around what's, you know, expected to be this big increase at the reset time? Thanks.
Speaker #4: Hey, everyone. Good morning. I guess the big news and congratulations is the double-digit shelf space gains that you talked about earlier. Can you maybe just give some more details?
Kaumil Gajrawala: Hey, everyone. Good morning. I guess the big news and congratulations is the double-digit shelf space gains that you talked about earlier. Can you maybe just give some more details? Where is it coming from? You know, when you go through a typical grocer, Frito-Lay has quite a bit of shelf space already. So is this, you know, within the salty snacks aisle? Is it incremental shelf space, maybe in other parts of the store? Just any more details around what's, you know, expected to be this big increase at the reset time? Thanks.
Speaker #4: Where is it coming from when you go through a typical grocer? Frito has quite a—Frito-Lay has quite a bit of shelf space already.
Speaker #4: So is this within the salty snack style? Is it incremental shelf space, maybe in other parts of the store? Just any more details around what's expected to be this big increase at reset time?
Speaker #3: Yeah, good question. And it is a great achievement of our commercial teams in partnership with our customers. And it will be in multiple as you can imagine, in multiple parts of the store.
Ramon Laguarta: Yeah, good, good question. It's, it is a great achievement of our commercial teams in partnership with our customers. It will, it will be in multiple, as you can imagine, in multiple parts of the store. It is in the main shelf, but it's also in the perimeter, and it's a consequence of the increased units that we're seeing as we make our category more affordable. There's clearly more throughput, and there needs to be more capacity in the store to either fulfill online or to give the consumers the in-store experience. So, yeah, both main shelf, perimeter, has been tested. Capacity will be critical for us to continue to increase the volume on the units.
Ramon Laguarta: Yeah, good, good question. It's, it is a great achievement of our commercial teams in partnership with our customers. It will, it will be in multiple, as you can imagine, in multiple parts of the store. It is in the main shelf, but it's also in the perimeter, and it's a consequence of the increased units that we're seeing as we make our category more affordable. There's clearly more throughput, and there needs to be more capacity in the store to either fulfill online or to give the consumers the in-store experience. So, yeah, both main shelf, perimeter, has been tested. Capacity will be critical for us to continue to increase the volume on the units.
Speaker #3: It is in the main shelf, but it's also in the perimeter. And it's a consequence of the increased units that we're seeing as we make our category more affordable.
Speaker #3: There's clearly more throughput, and there needs to be more capacity in the store. To either fulfill online or to give the consumers the in-store experience.
Speaker #3: So yeah, both main shelf and perimeter—it's been tested. Capacity will be critical for us to continue to increase the volume and the units.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Michael Lavery with Piper Sandler. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Michael Lavery with Piper Sandler. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Michael Lavery with Piper Sandler. Your line is open.
Speaker #1: open. Thank you.
Michael Lavery: Thank you. Good morning. I just wanted to come back to some of the innovation in marketing, but maybe on the biggest brands. I know that you're driving the savings to help fund step-ups there, but what's different maybe in the any shift in capabilities or strategically? Obviously, the biggest brands could potentially have the biggest impact if you can move the needle there. But just want to understand maybe what's changing, and is it primarily just a bigger push and visibility or help us unpack some of what you're hoping to work on your largest brands.
Michael Lavery: Thank you. Good morning. I just wanted to come back to some of the innovation in marketing, but maybe on the biggest brands. I know that you're driving the savings to help fund step-ups there, but what's different maybe in the any shift in capabilities or strategically? Obviously, the biggest brands could potentially have the biggest impact if you can move the needle there. But just want to understand maybe what's changing, and is it primarily just a bigger push and visibility or help us unpack some of what you're hoping to work on your largest brands.
Speaker #4: Good morning. Just wanted to come back to some of the innovation and marketing, but maybe on the biggest brands. I know that you're driving the savings to help fund step-ups there.
Speaker #4: But what's different maybe in the shift in capabilities or strategically? Obviously, the biggest brands could potentially have the biggest impact if you can move the needle there.
Speaker #4: But just want to understand maybe what's changing and is it primarily just a bigger push and visibility, or help us unpack some of what you're hoping to work on your largest
Speaker #4: brands. Yeah, let me take the
Ramon Laguarta: Yeah, let me take the example of Lay's, and that might, might give you a good sense. So Lay's, we're changing the, the visuals, with the idea of making the brand more, center on simplicity, nature, freshness, potato, you know, the ingredients of the food, because that's what consumers are looking for, the food in the, in the brand. There is a, you know, we're, we're also changing some of the oils, so you will see versions of Lay's with avocado oil. You will see versions of Lay's with olive oil. So it's an elevation of the ingredients. It's a simplicity of the portfolio. We're eliminating artificials, and we are, we are investing much more in terms of A&M and in terms of price points of the brand. So it's a holistic relaunch of the brand. We're doing it globally.
Ramon Laguarta: Yeah, let me take the example of Lay's, and that might, might give you a good sense. So Lay's, we're changing the, the visuals, with the idea of making the brand more, center on simplicity, nature, freshness, potato, you know, the ingredients of the food, because that's what consumers are looking for, the food in the, in the brand. There is a, you know, we're, we're also changing some of the oils, so you will see versions of Lay's with avocado oil. You will see versions of Lay's with olive oil. So it's an elevation of the ingredients. It's a simplicity of the portfolio. We're eliminating artificials, and we are, we are investing much more in terms of A&M and in terms of price points of the brand. So it's a holistic relaunch of the brand. We're doing it globally.
Speaker #2: example of Lay's and then my give you a good sense. So Lay's, we're changing the visuals with the idea of making the brand more centered on simplicity, nature, freshness, potato, the ingredients of the food, because that's what consumers are looking for.
Speaker #2: brand. There is The food in the a we're also changing some of the oils. So you will see versions of Lay's with avocado oil.
Speaker #2: You will see versions of Lay's with olive oil. So it's an elevation of the ingredients. It's a simplicity of the portfolio. We're eliminating artificials.
Speaker #2: And we are investing much more in terms of A&M. And in terms of price points of the brand. So it's a holistic relaunch of the brand.
Speaker #2: We're doing it globally, and we're elevating the farmers that produce our products—that grow our potatoes. And I think every time we do that, we see that consumers move away from the artificiality or high processing of our products, the perception, and they move to what it is, which is a simple product, cooked with precision at scale, and kitchen logic.
Ramon Laguarta: And we're elevating the farmers that produce our products, that grow our potatoes. And I think every time we do that, we see that consumers move them away from the artificiality or high processing of our products perception, and they move to what it is, which is, you know, simple product, cooked with precision at scale and kitchen logic, and no artificial. So that is the change in perception we're trying to do. It is working, and we'll continue to invest. Think about that, apply to Gatorade, apply to Quaker, apply to Tostitos, and you, you'll get a, you'll get a sense of what we're trying to do.
And we're elevating the farmers that produce our products, that grow our potatoes. And I think every time we do that, we see that consumers move them away from the artificiality or high processing of our products perception, and they move to what it is, which is, you know, simple product, cooked with precision at scale and kitchen logic, and no artificial. So that is the change in perception we're trying to do. It is working, and we'll continue to invest. Think about that, apply to Gatorade, apply to Quaker, apply to Tostitos, and you, you'll get a, you'll get a sense of what we're trying to do.
Speaker #2: And no artificial. So that is the change in perception we're trying to do. It is working, and we'll continue to invest. Think about that applied to Gatorade, applied to Quaker, applied to Tostitos.
Speaker #2: And you'll get a sense of what we're trying to do.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Steve Powers with Deutsche Bank. Your line is
Operator: Thank you. One moment for our next question. Our next question comes from Steve Powers with Deutsche Bank. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Steve Powers with Deutsche Bank. Your line is open.
Speaker #1: open. Great.
Steve Powers: Great. Good morning. Thanks. Ramon, if we, if we pivot back to PD&A and, and how you expect that segment to ultimately contribute in terms of growth and profit margin, you mentioned a number of drivers in your response earlier to Filippo's question. But I guess if we could drill a little further down, I'd, I'd love...
Steve Powers: Great. Good morning. Thanks. Ramon, if we, if we pivot back to PD&A and, and how you expect that segment to ultimately contribute in terms of growth and profit margin, you mentioned a number of drivers in your response earlier to Filippo's question. But I guess if we could drill a little further down, I'd, I'd love...
Speaker #4: Good morning. Thanks. Ramona, if we pivot back to PB&A and how you expect that segment to ultimately contribute in terms of growth and profit margin, you mentioned a number of drivers in your response earlier to Filippo's question.
Speaker #4: But I guess if we could drill a little further down, I'd love some perspective on how you expect the energy portfolio to contribute to that segment's progress, just how material that is to the plans in '26.
Steve Powers: ... some perspective on how you expect the energy portfolio to contribute to that segment's progress, just how material that is to the plans in 2026. And any early returns on either Celsius' category captaincy or the onboarding of Alani. Thank you.
... some perspective on how you expect the energy portfolio to contribute to that segment's progress, just how material that is to the plans in 2026. And any early returns on either Celsius' category captaincy or the onboarding of Alani. Thank you.
Speaker #4: And any early returns on either Celsius's category captaincy or the onboarding of Alani. Thank
Speaker #4: you. That's great.
Ramon Laguarta: That's great. So listen, I think we're very happy with the progress we're making in the beverage business. Our focus this year will be on increasing competitiveness of the business. I think there are some areas of the portfolio where we can be more competitive, and it's a combination of execution, it's a combination of affordability, brand building. So we're focused on that, in particular, on the soft drinks and parts of the functional hydration portfolio. So that would be the focus. And we feel good about the plans, and we feel good about the, again, the space, and we'll feel good about the investments we're gonna be making.
Ramon Laguarta: That's great. So listen, I think we're very happy with the progress we're making in the beverage business. Our focus this year will be on increasing competitiveness of the business. I think there are some areas of the portfolio where we can be more competitive, and it's a combination of execution, it's a combination of affordability, brand building. So we're focused on that, in particular, on the soft drinks and parts of the functional hydration portfolio. So that would be the focus. And we feel good about the plans, and we feel good about the, again, the space, and we'll feel good about the investments we're gonna be making.
Speaker #3: So, listen, I think we're very happy with the progress we're making in the beverage business. Our focus this year will be on increasing competitiveness of the business.
Speaker #3: I think there are some areas of the portfolio where we can be more competitive. And it's a combination of execution. It's a combination of affordability, brand building.
Speaker #3: So we're focused on that in particular, on the soft drinks and parts of the functional hydration portfolio. So that would be the focus, and we feel good about the plans.
Speaker #3: And we feel good about the, again, the space. And we feel good about the investments we're going to be making. So the other thing you should think about is we've been very consistent on improving the margins of the business.
Ramon Laguarta: The other thing you should think about is we've been very consistent on improving the margins of the business, and 2026 will be no different. We plan to continue to improve the margin of the beverage business in North America in the direction of the target that we shared with you in the past. Now, with this, especially on your specific question on energy, we're very happy with the way we want to participate in that fast-growing profit pool of the category, which is energy. The way we've engineered this through a combination of a distribution margin, plus participating in ownership of Celsius, I think is a good way for us to participate.
The other thing you should think about is we've been very consistent on improving the margins of the business, and 2026 will be no different. We plan to continue to improve the margin of the beverage business in North America in the direction of the target that we shared with you in the past. Now, with this, especially on your specific question on energy, we're very happy with the way we want to participate in that fast-growing profit pool of the category, which is energy. The way we've engineered this through a combination of a distribution margin, plus participating in ownership of Celsius, I think is a good way for us to participate.
Speaker #3: '26 will be no different. We plan to continue to improve the margin of the beverage business in North America, and in direction to the target that we shared with you in the past.
Speaker #3: Now, especially on your specific question on energy, we're very happy with the way we're going to participate in that fast-growing profit pool of the category, which is energy.
Speaker #3: The way we've engineered this through a combination of a distribution margin, plus participating in ownership of Celsius, I think is a good way for us to participate.
Ramon Laguarta: The Celsius brand continues to grow, and you know, the introduction or the integration of the Alani Nu portfolio into our business has been pretty positive so far. It's early. We still haven't completed all the distributors around the country, so we should see more acceleration in the coming months. But so far, we're seeing some of the metrics on execution already improving, and that should be positive for us going forward. There's very good collaboration with the Celsius team. I think the separation of functions between the brand building part and the execution part works well. And yeah, we should be able to continue to gain share in some... You know, I think we're close to 20% now for the full portfolio.
Speaker #3: The Celsius brand continues to grow. And the introduction or the integration of the Alani new portfolio into our business has been pretty positive so far.
The Celsius brand continues to grow, and you know, the introduction or the integration of the Alani Nu portfolio into our business has been pretty positive so far. It's early. We still haven't completed all the distributors around the country, so we should see more acceleration in the coming months. But so far, we're seeing some of the metrics on execution already improving, and that should be positive for us going forward. There's very good collaboration with the Celsius team. I think the separation of functions between the brand building part and the execution part works well. And yeah, we should be able to continue to gain share in some... You know, I think we're close to 20% now for the full portfolio.
Speaker #3: It's early. We still haven't completed all the distributors around the country. So we should see more acceleration in the coming months. But so far, we're seeing some of the metrics on execution already improving.
Speaker #3: And that should be positive for us going forward. There's very good collaboration with the Celsius team. I think this separation of functions between the brand-building part and the more the execution part works well.
Speaker #3: And yeah, we should be able to continue to gain share in some I think we're close to 20% now for the full portfolio. It's a meaningful participation in a category that is continuing to grow.
Ramon Laguarta: It's a meaningful participation in a category that is continuing to grow, but has opportunities to grow even further.
It's a meaningful participation in a category that is continuing to grow, but has opportunities to grow even further.
Speaker #3: But has opportunities to grow even.
Speaker #3: further. Thank you.
Steve Powers: Thank you. One moment for our next question. Our next question comes from Peter Galbo with Bank of America. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Peter Galbo with Bank of America. Your line is open.
Speaker #1: One moment for our next question. Our next question comes from Peter Galbo with Bank of America. Your line is open.
Speaker #5: Hey, guys. Good morning. Thanks for the question. I just wanted to follow up maybe a little bit on Filippo's question and Ramona’s. I think you've mentioned it a few times.
Peter Galbo: Hey, guys. Good morning. Thanks for the question. I just wanted to follow up, maybe a little bit on Filippo's question, and Ramon, I think you've mentioned it a few times. But just as we think about lapping some of the M&A that's gonna go into the organic, is there any way to kind of frame what those, once they become organic, kind of will be contributors to the full year? And I ask that just in the context of trying to compare the base business, kind of like for like, relative to when, you know, Poppi and Siete move into the organic base. Thanks very much.
Peter Galbo: Hey, guys. Good morning. Thanks for the question. I just wanted to follow up, maybe a little bit on Filippo's question, and Ramon, I think you've mentioned it a few times. But just as we think about lapping some of the M&A that's gonna go into the organic, is there any way to kind of frame what those, once they become organic, kind of will be contributors to the full year? And I ask that just in the context of trying to compare the base business, kind of like for like, relative to when, you know, Poppi and Siete move into the organic base. Thanks very much.
Speaker #5: But just as we think about lapping some of the M&A that's going to go into the organic is there any way to kind of frame what those once they become organic kind of will be contributors to the full year?
Speaker #5: And I ask that just in the context of trying to compare the base business kind of like-for-like, relative to when Poppy and Siete move into the organic base.
Speaker #5: Thanks very much.
Speaker #3: Hey, this is Steve. Maybe I'll just start with when they flip into organic. We have Siete that'll be in the March timeframe. Poppy in the July timeframe.
Steve Schmitt: Hey, this is Steve. Maybe I'll just start with when they flip into organic. We have Siete that'll be in the March timeframe, Poppi in the July timeframe, Alani Nu towards the end of the year, I think, as Ramon talked about. It should certainly help our organic growth. We haven't been specific on exactly what that will be, but we'll report on that as the quarters evolve.
Steve Schmitt: Hey, this is Steve. Maybe I'll just start with when they flip into organic. We have Siete that'll be in the March timeframe, Poppi in the July timeframe, Alani Nu towards the end of the year, I think, as Ramon talked about. It should certainly help our organic growth. We haven't been specific on exactly what that will be, but we'll report on that as the quarters evolve.
Speaker #3: Alani new towards the end of the year, I think, as Ramona talked about. It should certainly help our organic growth. We haven't been specific on exactly what that will be.
Speaker #3: But we'll report on that as the quarters evolve.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Chris Carey with Wells Fargo Securities. Your line is open.
Steve Powers: Thank you. One moment for our next question. Our next question comes from Chris Carey with Wells Fargo Securities. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Chris Carey with Wells Fargo Securities. Your line is open.
Speaker #6: Hi, good morning, everybody. So, trademark Pepsi grew volume and dollars in 2025, which is a great outcome. Can you just give us a sense of what went well in 2025, specifically for that business?
Christopher Carey: Hi, good morning, everybody. So trademark Pepsi grew volume and dollars in 2025, which is a great outcome. Can you just give us a sense of what went well in 2025, specifically for that business, and perhaps a bit of a preview of, you know, how you can continue that momentum in 2026? Obviously, there's, you know, some previews of ad spots that are coming up, among other initiatives. And just connected, it doesn't get a lot of attention, but Mountain Dew, you know, has been a bit more sluggish, but it's not an irrelevant brand, specifically for the PB&A business, which will be, you know, important as we get through the year.
Christopher Carey: Hi, good morning, everybody. So trademark Pepsi grew volume and dollars in 2025, which is a great outcome. Can you just give us a sense of what went well in 2025, specifically for that business, and perhaps a bit of a preview of, you know, how you can continue that momentum in 2026? Obviously, there's, you know, some previews of ad spots that are coming up, among other initiatives. And just connected, it doesn't get a lot of attention, but Mountain Dew, you know, has been a bit more sluggish, but it's not an irrelevant brand, specifically for the PB&A business, which will be, you know, important as we get through the year.
Speaker #6: And perhaps a bit of a preview of how you can continue that momentum in 2026. Obviously, there are some previews of ad spots that are coming up, among other initiatives.
Speaker #6: And just connected, it doesn't get a lot of attention, but Mountain Dew has been a bit more sluggish. But it's not an irrelevant brand specifically for the PB&A business, which will be important as we get through the year.
Speaker #6: Maybe just a few tidbits on how you're thinking about Mountain Dew and how to reinvigorate some of the growth, as what you had seen with brand Pepsi.
Christopher Carey: Maybe just, you know, a few tidbits on how you're thinking about Mountain Dew and how to reinvigorate some of the growth, as what you had seen with brand Pepsi. Thanks.
Maybe just, you know, a few tidbits on how you're thinking about Mountain Dew and how to reinvigorate some of the growth, as what you had seen with brand Pepsi. Thanks.
Speaker #6: Thanks.
Speaker #3: Great. So yeah, listen, we're happy with Pepsi. Obviously, it's a brand that is very important for our portfolio. Beverages in the US. And globally, and we're doing very well globally, but also is improving in the US.
Ramon Laguarta: Great. So yeah, listen, we're happy with, with Pepsi, obviously. It's a brand that is very important for, for our portfolio of beverages in the US and, and globally, and we're doing very well globally, but also is improving in the US. We're not satisfied yet, so I think we have more potential with Pepsi, and that's why we're, we're investing in a couple of areas. No sugar, as you saw, Pepsi Zero. I think we have a very good product, a product that over 100,000 consumers have told us that they prefer over our competitor based on our Pepsi challenge. And, you know, we want to tell our consumers that, "Hey, we're here and, and try us." So that's why we're investing in advertising in a way that is simple and, and easy to understand.
Ramon Laguarta: Great. So yeah, listen, we're happy with, with Pepsi, obviously. It's a brand that is very important for, for our portfolio of beverages in the US and, and globally, and we're doing very well globally, but also is improving in the US. We're not satisfied yet, so I think we have more potential with Pepsi, and that's why we're, we're investing in a couple of areas. No sugar, as you saw, Pepsi Zero. I think we have a very good product, a product that over 100,000 consumers have told us that they prefer over our competitor based on our Pepsi challenge. And, you know, we want to tell our consumers that, "Hey, we're here and, and try us." So that's why we're investing in advertising in a way that is simple and, and easy to understand.
Speaker #3: We're not satisfied yet. So, I think we have more potential with Pepsi, and that's why we're investing in a couple of areas—no sugar, as you saw.
Speaker #3: Pepsi Zero. I think we have a very good product, a product that over 100,000 consumers have told us that they prefer. Over our competitor, based on our Pepsi challenge.
Speaker #3: And we want to tell our consumers that, 'Hey, we're here and try us.' So that's why we're investing in advertising in a way that is simple and easy to understand.
Speaker #3: The same way we're being quite successful in our food-desserved Pepsi campaign. And that together with increasing our availability in restaurants and food consumption spaces away from home is also being a big driver of volume, but also I would say awareness and trial of the brand.
Ramon Laguarta: The same way we've been quite successful in our foodservice Pepsi campaign, and that, together with increasing our availability in restaurants and food consumption spaces away from home is also being a big driver of volume, but also I would say awareness and trial of the brand, and we'll continue to push on those two. So, feel good about Pepsi, feel good about our advertising, feel good about our consumer programs and customer programs. Now, Mountain Dew, as you said, it's been a more difficult project. I think we're making good progress. The teams are iterating innovation. Baja has been a very successful innovation for us and some of the flavors that go with that, especially with Hispanic population, but not only. We'll continue to iterate with...
The same way we've been quite successful in our foodservice Pepsi campaign, and that, together with increasing our availability in restaurants and food consumption spaces away from home is also being a big driver of volume, but also I would say awareness and trial of the brand, and we'll continue to push on those two. So, feel good about Pepsi, feel good about our advertising, feel good about our consumer programs and customer programs. Now, Mountain Dew, as you said, it's been a more difficult project. I think we're making good progress. The teams are iterating innovation. Baja has been a very successful innovation for us and some of the flavors that go with that, especially with Hispanic population, but not only. We'll continue to iterate with...
Speaker #3: And we'll continue to push on those, too. So feel good about Pepsi. Feel good about our advertising. Feel good about our consumer programs and customer programs.
Speaker #3: Now, Mountain Dew, as you said, has been a more difficult project. I think we're making good progress. The teams are iterating innovation. Baja has been a very successful innovation for us and some of the flavors that go with that, especially with Hispanic population, but not only.
Speaker #3: We'll continue to iterate with, I think we have a marketing model that is very local. It's a brand that is very different in different parts of the country.
Ramon Laguarta: I think we have a marketing model that is very local. It's a brand that is very different in different parts of the country, so our marketing needs to be quite segmented and granular, and I think our marketing teams are finding ways to be relevant in different parts of the country, with the same brand, but obviously different messages, different innovation, and different portfolios. So we feel good. It will take a little bit longer, I would say, for Mountain Dew, but we're seeing progress. 25 was better than 24, and 26 will be better than 25.
I think we have a marketing model that is very local. It's a brand that is very different in different parts of the country, so our marketing needs to be quite segmented and granular, and I think our marketing teams are finding ways to be relevant in different parts of the country, with the same brand, but obviously different messages, different innovation, and different portfolios. So we feel good. It will take a little bit longer, I would say, for Mountain Dew, but we're seeing progress. 25 was better than 24, and 26 will be better than 25.
Speaker #3: So our marketing needs to be quite segmented and granular. And I think our marketing teams are finding ways to be relevant in different parts of the country.
Speaker #3: With the same brand, but obviously different messages, different innovation, and a different portfolio. So we feel good. It will take a little bit longer, I would say, for Mountain Dew.
Speaker #3: But we're seeing progress. 25 was better than 24 and 26 will be better than 25.
Speaker #1: Thank you. One moment for our next question. Our next question comes from Robert Moscow with TD Cowen. Your line is
Operator: Thank you. One moment for our next question. Our next question comes from Robert Moskow with TD Cowen. Your line is open.
Operator: Thank you. One moment for our next question. Our next question comes from Robert Moskow with TD Cowen. Your line is open.
Speaker #1: open. Hi.
Robert Moskow: Hi. Thanks, Ramon. I was hoping if you'd give us just a little bit of an update on the tests that you're conducting in Texas, and I think Florida too, where you're merging food and beverage distribution. What's working, and are there elements of the combination that are difficult to execute? And how does that inform the broader strategic review that you're conducting for North America Beverages distribution? Thanks.
Robert Moskow: Hi. Thanks, Ramon. I was hoping if you'd give us just a little bit of an update on the tests that you're conducting in Texas, and I think Florida too, where you're merging food and beverage distribution. What's working, and are there elements of the combination that are difficult to execute? And how does that inform the broader strategic review that you're conducting for North America Beverages distribution? Thanks.
Speaker #7: Thanks, Ramona. I was hoping you could give us just a little bit of an update on the tests that you're conducting in Texas, and I think Florida too, where you're merging food and beverage distribution.
Speaker #7: What's working? And are there elements of the combination that are difficult to execute? And how does that inform the broader strategic review that you're conducting for North America Beverages distribution?
Speaker #7: Thanks.
Speaker #3: Yeah, great question. And it's clearly an area of focus for us—eliminating duplications between our two large U.S. businesses and finding ways to create advantage on the integration is where we're working on.
Ramon Laguarta: Yeah, great, great question, and it's clearly an area of focus for us. Eliminating duplications between our two large US businesses and finding ways to create advantage on the integration is where we're working on. There is some good insights already in, you know, integrated delivery, integrated inventory points. So those are very positive initial numbers that we're getting that will make us more cost efficient, but at the same time, more flexible to provide better customer service, which at the end is one of the drivers of value. We plan to update all of you later in the year, towards the end of the year, with specific details on our plans going forward.
Ramon Laguarta: Yeah, great, great question, and it's clearly an area of focus for us. Eliminating duplications between our two large US businesses and finding ways to create advantage on the integration is where we're working on. There is some good insights already in, you know, integrated delivery, integrated inventory points. So those are very positive initial numbers that we're getting that will make us more cost efficient, but at the same time, more flexible to provide better customer service, which at the end is one of the drivers of value. We plan to update all of you later in the year, towards the end of the year, with specific details on our plans going forward.
Speaker #3: There are some good insights already in integrated delivery, integrated inventory points, so those are very positive initial numbers that we're getting. That will make us more cost-efficient, but at the same time more flexible to provide better customer service, which at the end is one of the drivers of value.
Speaker #3: We plan to update all of you later in the year, towards the end of the year, with specific details on our plans going forward.
Speaker #3: So we're working on learning as much as we can, scaling some of the solutions. There's obviously technical, IT, systems solutions that we're putting in place that would be high value, I think, for us and for the industry.
Ramon Laguarta: So, we're working on, you know, learning as much as we can, scaling some of the solutions. There's obviously technical IT systems solutions that we're putting in place that would be, you know, high value, I think, for us and for the industry. There's also some innovation in terms of vehicles and some of the transportation, the trucks that we have to put in place. So there is innovation, there is discovery, and there is some of our best people are against this project, which gives us a lot of confidence that we'll build something unique that will be high value for the company, both in terms of efficiency and also in terms of giving our customers a much better service for the demand of the future.
So, we're working on, you know, learning as much as we can, scaling some of the solutions. There's obviously technical IT systems solutions that we're putting in place that would be, you know, high value, I think, for us and for the industry. There's also some innovation in terms of vehicles and some of the transportation, the trucks that we have to put in place. So there is innovation, there is discovery, and there is some of our best people are against this project, which gives us a lot of confidence that we'll build something unique that will be high value for the company, both in terms of efficiency and also in terms of giving our customers a much better service for the demand of the future.
Speaker #3: There's also some innovation in terms of vehicles and some of the transportation trucks that we have to put in place, so there is innovation.
Speaker #3: There is discovery, and there is some of our best people are against this project, which gives us a lot of confidence that we'll build something unique that will be high value for the company both in terms of efficiency and also in terms of giving our customers a much better service for the demand of the future.
Speaker #3: Now, as we said in the past, this will not be a one-size-fits-all for the U.S., because the reality of the marketplace is very different.
Ramon Laguarta: Now, as we said in the past, this will not be a one-size-fits-all for the US, because the reality of the marketplace is very different, and we will construct a scaled model that takes into consideration the nuances of every part of the US, including potential small refranchising models in part of the country, if we consider that that is the best solution. Again, very small parts, very kind of complementary to our main assumption, which is that the integration of the two businesses will drive a lot of value.
Now, as we said in the past, this will not be a one-size-fits-all for the US, because the reality of the marketplace is very different, and we will construct a scaled model that takes into consideration the nuances of every part of the US, including potential small refranchising models in part of the country, if we consider that that is the best solution. Again, very small parts, very kind of complementary to our main assumption, which is that the integration of the two businesses will drive a lot of value.
Speaker #3: And we will construct a scale model that takes into consideration the nuances of every part of the U.S., including potential small refranchising models in part of the country if we consider that that is the best solution.
Speaker #3: Again, very small parts, very kind of complementary to our main assumption, which is that the integration of the two businesses will drive a lot of value.
Speaker #1: Thank you. One moment for our next question. Our last question comes from Robert Oddstein with Evercore ISI. Your line is open.
Operator: Thank you. One moment for our next question. Our last question comes from Robert Ottenstein with Evercore ISI. Your line is open.
Operator: Thank you. One moment for our next question. Our last question comes from Robert Ottenstein with Evercore ISI. Your line is open.
Speaker #8: Great. Thank you very much. I was wondering if you could just kind of step back and touch on the macro backdrop that you're working with, maybe any change in trends in major markets through the fourth quarter, and into January, any expectations of the impact of government measures in the US, and what do you think about in terms of the macro conditions in terms of your guidance for the year?
Robert Ottenstein: Great. Thank you very much. I was wondering if you could just kinda step back and touch on the macro backdrop that you're working with. Maybe any change in trends in major markets through the fourth quarter and into January? Any expectations of the impact of government measures in the US? And, you know, what are you thinking about, you know, in terms of the macro conditions in terms of your guidance for the year? Are you expecting things to kinda continue the way they are, or kinda pick up or weaken in any key markets in terms of supporting your guidance? Thank you.
Robert Ottenstein: Great. Thank you very much. I was wondering if you could just kinda step back and touch on the macro backdrop that you're working with. Maybe any change in trends in major markets through the fourth quarter and into January? Any expectations of the impact of government measures in the US? And, you know, what are you thinking about, you know, in terms of the macro conditions in terms of your guidance for the year? Are you expecting things to kinda continue the way they are, or kinda pick up or weaken in any key markets in terms of supporting your guidance? Thank you.
Speaker #8: Are you expecting things to kind of continue the way they are, or kind of pick up, or weaken in any key markets in terms of supporting your guidance?
Speaker #8: Thank you.
Speaker #3: Yeah, the way we've constructed our guidance is continuistic. From what we've seen in Q4, so clearly a middle and low-income consumer that continues to be stretched and choice full, and that we have to earn being part of their basket every day.
Ramon Laguarta: Yeah, the way we've constructed our guidance is consistent, you know, from what we've seen in Q4. So clearly a middle and low-income consumer that continues to be stretched and choiceful, and that we have to earn being part of their basket every day. I think that's how we're thinking about it for the US. Internationally, we're seeing, you know, different parts of the world behaving differently, but we're optimistic about Mexico, as I said earlier. We're seeing positive trends in China. Again, I'm referring to our business and the surroundings of our business rather than larger macros. We're seeing a positive situation in the Middle East. We're seeing a good consumer there as well.
Ramon Laguarta: Yeah, the way we've constructed our guidance is consistent, you know, from what we've seen in Q4. So clearly a middle and low-income consumer that continues to be stretched and choiceful, and that we have to earn being part of their basket every day. I think that's how we're thinking about it for the US. Internationally, we're seeing, you know, different parts of the world behaving differently, but we're optimistic about Mexico, as I said earlier. We're seeing positive trends in China. Again, I'm referring to our business and the surroundings of our business rather than larger macros. We're seeing a positive situation in the Middle East. We're seeing a good consumer there as well.
Speaker #3: I think that's how we're thinking about it for the US. Internationally, we're seeing a different parts of the world behave differently, but we're optimistic about Mexico.
Speaker #3: As I said earlier, we're seeing positive trends in China. Again, I'm referring to our business and the surroundings of our business, rather than larger macros.
Speaker #3: We're seeing a positive situation in the Middle East. We're seeing a good consumer there as well. A bit weaker in Western Europe, and then Brazil is kind of neutral.
Ramon Laguarta: A bit weaker in Western Europe, and then Brazil, kind of neutral. So those are our bigger markets, and those are the assumptions that we've been putting in our guidance. Overall, I would say rather continuistic based on the, on the data that we have, with, you know, monthly data that we have with consumers. Okay, so I think that this is the last call, question. So thank you very much, everybody, for joining us today and, and for the, confidence you've placed in our stock. And, I look forward to seeing you in Cannes in a couple of weeks and continuing the conversation. Thank you.
A bit weaker in Western Europe, and then Brazil, kind of neutral. So those are our bigger markets, and those are the assumptions that we've been putting in our guidance. Overall, I would say rather continuistic based on the, on the data that we have, with, you know, monthly data that we have with consumers. Okay, so I think that this is the last call, question. So thank you very much, everybody, for joining us today and, and for the, confidence you've placed in our stock. And, I look forward to seeing you in Cannes in a couple of weeks and continuing the conversation. Thank you.
Speaker #3: So those are our bigger markets. And those are the assumptions that we've been putting in our guidance. Overall, I would say rather continuistic, based on the data that we have, with monthly data that we have with consumers.
Speaker #3: Okay, so I think this is the last question. So, thank you very much, everybody, for joining us today and for the confidence you've placed in our stock.
Speaker #3: And I look forward to seeing you in Cagney in a couple of weeks and continuing the conversation. Thank you.
Operator: Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.
Operator: Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.