Dive Brief:
- PepsiCo reported fourth quarter earnings Thursday morning, with its Frito-Lay snacks division showing 3% growth in North America despite soft drink sales falling in the "mid-single digits." Non-carbonated drinks like Gatorade and Aquafina water grew in the "low-single digits"
- The company said it will stand by its drinks division, which some, including activist investor Nelson Peltz, have called for it to spin off despite falling sales.
- CEO Indra Nooyi sees the two sides of the business as complementing one another, and, like Dr Pepper Snapple Group Inc., PepsiCo will try to improve its results by using new natural sweeteners in its drinks.
Dive Insight:
Not only have soda sales been in decline, but PepsiCo has lost ground to longtime rival Coca-Cola Co. Both companies, along with the aforementioned Dr. Pepper and other smaller players, have had a time with trying to address the soda sales decline in the U.S. as consumers opt for healthier options — or just ingredients seen as "natural." That said, Coca-Cola reports its earnings next week, so it will be interesting to see how the two giants compare.