After years of price hikes and numerous complaints, PepsiCo is finally listening to its customers. The maker of Doritos announced yesterday it will cut the cost of its most popular snacks “up to 15%” as early as this week to appeal to Americans feeling the pinch in a K-shaped economy.
Now, the pain that comes with a bag of Flamin’ Hot Cheetos will still exist after you eat them but less so when you’re buying them. It’s a new direction:
- The average price of PepsiCo products climbed about 4% in the last two years after skyrocketing by double-digit percentages in 2022 and 2023.
- Since 2020, retail prices for salty snacks across the industry were up 38% as of June 2024, according to Jefferies analysts.
Market adjustment: PepsiCo CEO Ramon Laguarta said this was a direct response to low- and middle-income consumers either abstaining from snacks or purchasing cheaper store-brand options. The company was also barraged with complaints about high prices via voicemails and emails.
No shrinkflation: Sizing will remain the same, but the new sales tag will be advertised at a lower price.
Zoom out: The price reductions coincide with this weekend’s Super Bowl, a big day for snacking. During the big game in 2024, Americans spent $670 million on snacks—tortilla chips were among the biggest sellers.—DL
This report was originally published by Morning Brew.