‘We don’t feel good’: PepsiCo plans price hike on Doritos, Ruffles, SunChips and sodas after offsetting costs with $178 million tariff refund

PepsiCo, a global snack and beverage company, announced plans to raise prices on popular brands such as Doritos, Ruffles, SunChips, and certain sodas due to rising costs, according to a report on Fortune.com. The price hikes, expected to be a single-digit percentage increase, will be offset by a $178 million refund from U.S. tariff offsets obtained after the Supreme Court overturned President Trump's global tariffs.

PepsiCo CEO Stephen E. Juraga explained that the company must raise prices to recoup costs associated with fuel, aluminum, and agricultural commodities. However, he acknowledged that the price increases come at a time when many American households are already financially strained. In response to the COVID-19 pandemic, PepsiCo had previously increased prices by double-digit percentages for eight consecutive quarters in 2022 and 2023, but sales of its snacks and drinks had declined in response.

Activist investor Elliott Investment Management had pressed for lower prices earlier this year, leading PepsiCo to slash prices on Lay’s, Doritos, Cheetos, and Tostitos chips by up to 15% before the Super Bowl. While these lower prices have brought back some consumers, PepsiCo's third-quarter results still fell short of expectations, with flat sales in Canada and a 2% drop in beverage volumes.

Laguarta also expressed concern about the performance of PepsiCo's beverage business, stating, "We don’t feel good about the beverage business." While energy drink sales like Celsius performed well, soda sales declined. PepsiCo has since set its sights on improving performance in the soft drink category.

Despite the price increases, PepsiCo reported a 5.6% rise in net revenue to $25.27 billion for the July-September quarter, surpassing analysts' expectations of $24.95 billion. The global snack food volumes increased by 4%, the highest growth rate since 2021, driven by strong demand for Lay’s snacks during the World Cup and increased market share in China and Brazil. Net income grew by 17% to $3.07 billion, with adjusted earnings per share reaching $2.34, beating analysts' projections.