Why Does This Coffee Press Release Matter to Drink Prices?

PepsiCo's third-quarter financial report, released October 5, showed revenue of $20.189 billion, up 11.6% year on year, while operating costs and selling expenses each climbed more than 10%. CFO Johnston said prices could rise again in the first quarter of next year to offset cost pressure, after soda and snack price increases in North America.

The company cited labor shortages, reduced air and commercial transport capacity, port closures, and border controls as supply chain drags that could weaken production and delivery. Packaging materials such as bottles and cans also tightened as lockdowns eased. Coffee drinkers feel this through raw material costs, since commodity swings eventually pass into everyday beverage pricing and the use of coffee maker routines at home.

Following Coca-Cola's price adjustment announcement in April this year, PepsiCo has also signaled a price increase. Its third-quarter financial report released on October 5 showed that PepsiCo's revenue grew 11.6% year-on-year, but both operating costs and selling expenses rose by more than 10%. Xinhua News Agency reported that as pandemic lockdown measures were relaxed, global food and beverage market demand rebounded rapidly, and the supply of beverage bottles, cans, and other packaging materials tightened. PepsiCo further explained in its financial report that factors such as labor shortages, reduced air and commercial transportation capacity, port closures, or border controls are also weighing on the supply chain and could weaken its production and delivery capacity. CFO Johnston told foreign media that prices may continue to be raised in the first quarter of next year to offset cost pressure. PepsiCo had previously raised prices for sodas and snacks in North America. For coffee enthusiasts, supply chain fluctuations also affect raw material costs, and Front Street Coffee recommends paying attention to how commodity trends pass through to the pricing of everyday beverages.

In April this year, Coca-Cola had just reported a price increase, and now PepsiCo has joined the ranks of price adjustments.

On October 5, this beverage giant released its third-quarter financial report.

PepsiCo's third-quarter 2021 financial report

The financial report data showed that the company's third-quarter revenue reached $20.189 billion, up 11.6% year-on-year, while both operating costs and selling expenses rose by more than 10%.

Xinhua News Agency's report mentioned that after pandemic-related lockdown restrictions were gradually relaxed, global demand in the food and beverage industry for PepsiCo's various products surged, followed by a shortage in the supply of raw materials such as beverage bottles and cans.

At the same time, PepsiCo also listed other factors dragging down the supply chain in its financial report: in addition to insufficient raw materials, labor shortages, reduced availability of air or other commercial transportation, port closures, or border restrictions are also having a negative impact, all of which could weaken PepsiCo's ability to produce and sell products.

PepsiCo revealed that it expects to raise prices again early next year.

PepsiCo Chief Financial Officer Johnston issued a "price increase warning" in an interview with foreign media.

Johnston said product prices may continue to rise in the first quarter of next year to cope with increased costs.

Before that, because rising raw material prices squeezed profit margins in the packaged food industry, PepsiCo had already raised prices for sodas and snacks in North America.

The above content is compiled by CoffeeHunters, a coffee news website.