PURCHASE, NY — “Consumer-centric innovation” that included such products as Doritos 3D and Cheetos Crunch Pop Mix helped deliver operating profit and sales gains at Frito-Lay North America in fiscal 2021, said Ramon L. Laguarta, chairman and chief executive officer of PepsiCo, Inc.
In prepared remarks issued Feb. 10 in advance of the company’s financial results, Mr. Laguarta noted that the company’s FLNA business was ranked the No. 1 innovation driver across the salty and savory categories in 2021, as defined by IRI, a Chicago-based market research firm.
Operating profit in the FLNA division was $5.63 billion in the fiscal year ended Dec. 25, 2021, up 5.4% from $5.34 billion in the same period a year ago. Revenues were $19.61 billion, up 7.8% from $18.19 billion.
“Frito-Lay’s full-year results were also aided by capability and capacity investments across the value chain to support growth with our variety pack offerings delivering strong double-digit net revenue growth in both the fourth quarter and full year,” Mr. Laguarta said. “In addition, many of Frito-Lay’s large, beloved brands delivered strong net revenue growth for the full year with Ruffles delivering double-digit net revenue growth, Doritos delivering high-single-digit net revenue growth, and Lay’s, Tostitos and Cheetos delivering solid net revenue growth.”
Mr. Laguarta also said emerging brands geared toward more nutritious snacking, such as Bare, Smartfood and PopCorners delivered strong sales growth in the quarter and year.
Operating profit in the Quaker Foods North America business, meanwhile, eased 14% in fiscal 2021 to $578 million from $669 million, primarily reflecting supply chain bottlenecks as well as escalating inflationary pressures related to commodity, transportation and labor costs. Revenues inched up to $2.75 billion from $2.74 billion.
“Throughout 2021, we tailored and extended our Quaker brands to focus on consumer-centric innovation within convenient foods, while also targeting new occasions,” Mr. Laguarta said. “Some examples include Cheetos Mac ‘n Cheese, Pasta Roni Heat & Eat and light snacks offerings such as rice crisps and rice cakes. As a result, our business held or gained market share in the convenient meals, light snacks, and hot and ready-to-eat cereal categories in the US in 2021.”
Overall, net income at PepsiCo in fiscal 2021 totaled $7.62 billion, equal to $5.49 per share on the common stock, up 7% from $7.12 billion, or $5.12 per share, in the same period a year ago. Revenues were $79.47 billion, up 13% from $70.37 billion.
“Our full-year net revenue growth meaningfully accelerated in 2021 versus the previous year and this gives us added confidence that the investments we’ve made in our people, brands, innovation, supply chain, go-to-market systems and digitization initiatives are working,” Mr. Laguarta said.Looking ahead to fiscal 2022, Mr. Laguarta said PepsiCo expects to deliver 6% organic revenue growth, which would be at the high end of its long-term target range. The company also expects to deliver 8% core constant currency earnings per share growth.