Who says the Sweet and Salty Snack mega-powers can’t afford to cut their prices? Facing a serious sales slump, conglomerates such as PepsiCo are moving toward healthier options. And now, they’re listening to consumers who want price cuts…
The story is actually more earth-shuddering than you might think, at first glance. Because price cuts of 15 percent on the most popular Lay’s snack brands are not only significant in themselves, but the first ever in the industry…
‘We heard you!’
‘At the heart of our business are the consumers who choose our brands, ” the news release begins. “They trust us to bring them moments of joy, and they’ve been honest with us about how rising everyday costs are making their daily decisions harder. Message received…”
PepsiCo is taking a meaningful step to lower the price on many of their ‘most loved’ snacks by up to nearly 15 percent in the US. This includes flagship favourites such as Lay’s, Doritos, Cheetos, Tostitos and more.
“We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” says Rachel Ferdinando, CEO PepsiCo Foods US. “Lowering the suggested retail price reflects our commitment to help reduce the pressure where we can.”
Timing no coincidence
And the timing of the cuts is no coincidence. In fact, Pepsi admits, “the change comes as households gear up for one of the year’s biggest snacking occasions.”
They don’t name it, but they clearly mean the Super Bowl. PepsiCo sponsored the halftime show at the big game until 2022 when they elected not to renew their support. But the company is still paying millions to air a special Super Bowl-themed commercial during the game broadcast.
Products remain the same
“The snacks themselves remain the same, complemented by ongoing recipe and packaging updates shaped directly by consumer feedback.” There you have more indications of notable changes to come. Pepsi no sooner assured fans the products would stay the same, than it admitted it may change its recipes as time goes by.
The changes are billed as part of PepsiCo’s broader strategy to ‘increase accessibility and offer more choices for consumers’. They’re continuing to ‘refine their portfolio’, from recipe enhancements, such as the removal of artificial flavours and colours from Lay’s and Tostitos, to packaging updates ‘aligned with evolving consumer preferences’.
My take
Up to now they’ve been using shrinkflation to keep their manufacturing costs in line with without raising prices. But consumers have gotten wise to that shady deception. And are revolting against that kind of ‘white’ lie’ marketing.
With no other tricks up their sleeve, Pepsi has become the first major snack maker to resort to major changes and price cuts. And now that Pepsi has blinked, so to speak, the other major snack purvey-ors, including arch rival Coke, are sure to follow suit, just to keep up.
While we all thought the big junk food news this year was going to be the escalation of the Fast Food Value Wars, the Snacks sector has crept up on the inside as the real ‘non-essentials’ foodsphere conflict heats up…
~Maggie. J