Due to the tight supply chain, PepsiCo said it will increase product prices next year!

Recently, PepsiCo released its third-quarter 2021 financial report. The report showed that the company's revenue in the third quarter was US$20.189 billion, a year-on-year increase of 11.6%, and its net profit was US$2.224 billion, a year-on-year decrease of 2.9%. However, PepsiCo's operating costs rose by more than 10% from July to September . In addition to the increase in marketing expenses, supply chain shocks were an important reason for the increase in operating costs.

Due to the epidemic, the demand for Pepsi-Cola in American restaurants and cinemas has surged, but the shortage of raw materials, insufficient product packaging bottles, tight production supply, and weak port and inland transportation will all affect the production and sales of products. The tight supply chain will directly lead to rising product prices .

In fact, since the second quarter, rising prices of raw materials and costs have become a major issue, and many North American fast food brands, beverage brands and other companies producing daily necessities have expressed their intention to increase product prices.

PepsiCo said that transportation and commodity costs in the third quarter of this fiscal year were higher than expected. In an interview on the same day, the company's chief financial officer Hugh Johnston said that product prices may continue to increase in the first quarter of next year to cope with the increase in costs.

Johnston said that buying commodities and raw materials in advance through forward contracts only provides a short-term buffer and does not insulate PepsiCo from the impact of inflation. Most supply chain disruptions are expected to ease by the end of 2021.

As a global beverage giant, PepsiCo has always maintained relatively stable prices and has always been accepted by the public. However, due to the impact of the epidemic and the supply chain, PepsiCo stated that it will increase product prices in the first quarter of next year. I wonder what the public thinks about this.

A considerable number of people also said that their psychological dependence on the Pepsi brand is strong enough, so even a slight price increase will not change people's feelings towards Pepsi. What do you think?

Pepsi

The product price will increase in the first quarter of next year