At the World Economic Forum in Davos, Switzerland, PepsiCo CEO Ramon Laguarta addressed concerns about the food industry under the new Trump administration.
Laguarta expressed confidence, stating that PepsiCo has been at the forefront of transforming the food landscape for many years. He highlighted the company’s efforts in reducing sodium, sugar, and artificial colors in their products. “We’ve been leaders in making healthier choices,” he explained.
However, there is growing skepticism towards packaged foods, especially with Trump’s recent appointment of Robert Kennedy Jr. as head of Health & Human Services. Kennedy is known for criticizing the packaged foods industry. This sentiment has been compounded by recent health warnings, including the former surgeon general’s recommendation to label alcohol for cancer risks and the FDA’s ban on red dye No. 3 in consumables. Laguarta pointed out that PepsiCo never included this dye in their U.S. offerings.
Investor confidence is shaky as health news pushes the narrative that companies like PepsiCo may need to reformulate products—potentially at high costs. This negative attention isn’t ideal for business, especially during a time when their stock has dropped about 14% over the past three months, significantly underperforming the S&P 500.
Laguarta hopes to work collaboratively with the new administration to phase out artificial colors in foods, advocating for a science-based approach. “In three or four years, we should aim for no artificial colors in food,” he stated. He believes this goal is achievable through cooperation between the private sector and government.
For PepsiCo, the struggling stock price also mirrors challenges within their snacks and beverages sectors. Sales have declined, affected by cautious consumer spending, especially among lower-income families, and a strong dollar that dampens international sales.
In the third quarter, PepsiCo reported a 0.6% drop in sales and a 5% decline in earnings compared to the previous year. As they prepare to release their 2025 outlook, analysts expect mixed results.
Analyst Nik Modi from RBC shared insights regarding PepsiCo’s performance, predicting a cautious forecast. “Management recognizes the need for improvement,” Modi noted while commenting on the impact of their prior high sales expectations versus current realities.
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PepsiCo, food industry, Ramon Laguarta, packaged foods, World Economic Forum, DAVOS, SWITZERLAND, artificial colors, new administration
