NEW YORK (AP) — Americans are gobbling up more of PepsiCo's Frito-Lay snacks. As for the company's sodas, customers are apparently less enthusiastic.
That's the quandary for PepsiCo Inc., the soda and snack maker that also owns Gatorade, Mountain Dew, Tropicana and Quaker Oats. Although the company's Cheetos, Doritos and other snacks dominate supermarket shelves, its North American drinks unit has perennially played second fiddle to the world's No. 1 beverage maker, Coca-Cola.
That story line played out yet again in the company's third quarter, with PepsiCo reporting a better-than-expected profit as stronger snack sales helped offset a 4 percent volume decline for the North American drinks unit.
Soda volume fell in the region fell in the "mid-single digits," which PepsiCo partly attributed to its strategy of holding or raising prices. Uncarbonated drinks fell in the "low-single digits."
Coca-Cola reported stronger results for its North American unit a day earlier, with overall volume up 2 percent. Uncarbonated drinks rose 5 percent and soda volume was even from a year ago.
Despite the volume declines in PepsiCo's North American beverage unit, CEO Indra Nooyi stressed in a conference call with analysts that the broader $95 billion beverage industry remains a "pretty damn good business" in terms of generating cash for the company.
She also suggested that the company's fortunes could turn as people move away from sodas, given PepsiCo's leadership position in uncarbonated drinks. Gatorade, for example, leads Coca-Cola's Powerade in the sports drink category.
She noted that sodas now account for about 40 percent of the beverage industry, down from more than 50 percent a decade ago, and that the shift away from carbonated soft drinks continues.
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