Dive Brief:
- Despite seeing increased revenue from the sale of high-fat, high-salt consumer favorites such as Doritos and Cheetos, PepsiCo says it hopes to create more “good for you snacks” in the future, according to The Wall Street Journal.
- The company announced in October that it expects to see sales growth of its nutritious products outpace the rest of its portfolio by 2025. But it has made previous claims like this, and has fallen behind in its announced 2010 goal to triple revenue from nutritious products to $30 billion this decade.
- “Everybody is looking for this transformation, and yet the big wheels of commerce don’t support this transformation,’’ former PepsiCo President Zein Abdalla told The Wall Street Journal.
Dive Insight:
PepsiCo isn’t alone in wanting to provide healthier food for consumers or in struggling to make it lucrative. Nestle made similar company commitments and fell short of its revenue growth target for the fourth year in a row.
It seems that despite consumer health trends and purported interest in better-for-you foods, the majority prefer snack items that fall under the junk food umbrella.
This isn't to say that healthy food sales aren’t doing well. Global sales of healthy food products are expected to reach $1 trillion by next year, according to Euromonitor. But given the choice, it seems more Americans would still rather reach for a bag of chips than a piece of fruit.
The best way for manufacturers to survive this dichotomy is to continue to offer new healthy choices and hope something catches fire with the millennial crowd. But companies can’t move away from unhealthy products unless their willing to see profits drop. Just like PepsiCo, food companies are going to need to appeal to both healthy and non-healthy consumers.