Have Potato Chips Reached Peak Price?

Original Article:

Source: Link

Is $6 too much for a bag of Ruffles? After nearly three years of price increases, signs that buyers have had enough are starting to mount. On Thursday, the food and beverage giant PepsiCo reported a 0.5 percent decline in revenues in the second quarter in its Frito-Lay snack business from year-ago levels, a result of a 4 percent drop in volumes in the category. On an earnings call, PepsiCo executives were peppered with questions from analysts about whether the price of some of its popular snacks like Tostitos tortilla chips and Ruffles potato chips had simply become too high. The executives acknowledged that some consumers have become increasingly price conscious, with households across income levels seeking more value. “There is clearly a consumer that is more challenged, and a consumer that is telling us that in particular parts of our portfolio, they want more value to stay with our brands,” Ramon Laguarta, PepsiCo’s chief executive, said. To get more people to grab bags off the shelves, PepsiCo said it intended to cut prices or offer more sales on certain salty snacks and other products. “There is some value to be given back to consumers after three or four years of a lot of inflation,” Mr. Laguarta said.