PepsiCo’s CEO Ramon Laguarta has declared the company’s international business as its primary growth engine, with India playing a pivotal role in this expansion. Despite a slight dip in overall net revenue in the first quarter of 2025, the global beverage and snack giant is bullish on its international operations, particularly highlighting the strong performance and future potential of the Indian market.
During the company’s Q1 2025 earnings call, Chairman and CEO Ramon Laguarta emphasized the significant contribution of PepsiCo’s international business to its overall growth. He stated, “The international business continues to be the kind of largest growth engine for the company, and we continue to invest in that 1 business.” The first quarter saw the international segment report an impressive 11% organic revenue growth in its beverages business. Key markets driving this growth included China, India, Egypt, Turkey, Mexico, Brazil, the UK, and Australia.
India’s contribution extends beyond just the beverage sector. Laguarta specifically pointed out India’s strong performance in the international convenience foods segment as well. The international convenient foods business witnessed a 2% organic revenue growth, with India, Brazil, Egypt, and Turkey being the primary drivers. This indicates a robust demand for PepsiCo’s snack portfolio, including popular brands like Lay’s and Kurkure, in the Indian market.
PepsiCo’s leadership has consistently highlighted India as a crucial market with immense long-term potential. Laguarta reiterated this sentiment, stating that the company is actively investing in building infrastructure and strengthening its brands in India to capitalize on the anticipated high demand for many years to come. This commitment includes expanding manufacturing capabilities and enhancing distribution networks to reach a wider consumer base across the country.
Despite the strong performance of its international business, PepsiCo reported a slight decrease of 1.81% in its overall net revenue for Q1 2025, amounting to $17.9 billion. The company’s operating profit also saw a decline of 4.9% to $2.58 billion. PepsiCo attributed this dip primarily to substantial foreign exchange headwinds impacting its reported revenue. Additionally, the company has adjusted its forecast for constant currency earnings per share for the full year, citing increased tariff costs, macroeconomic uncertainty, and cautious consumer spending in some markets.
Despite these challenges, PepsiCo remains optimistic about the growth prospects of its international business. Laguarta noted that the company anticipates this segment will continue to contribute to overall growth at a mid-single-digit rate for the remainder of the year, with some markets, including India, potentially delivering high single-digit growth. This confidence stems from the diverse portfolio and the company’s strategic investments in key high-growth markets like India.
Summary:
- PepsiCo CEO Ramon Laguarta identifies the international business as the company’s largest growth engine.
- India is highlighted as a key market driving growth in both the beverages (11% organic revenue growth in Q1) and convenient foods (2% organic revenue growth in Q1) segments.
- PepsiCo is making strategic investments in India to capitalize on the market’s long-term growth potential.
- Overall net revenue for PepsiCo saw a slight decline in Q1 2025 due to foreign exchange headwinds, but the outlook for international growth remains positive.