PURCHASE, NY. — PepsiCo, Inc.’s Gatorade and Propel brands are achieving their potential. Both registered net revenue growth in the mid-single-digit percentages while Ramon Laguarta, chief executive officer of PepsiCo, Inc., pointed to market share gains in the sports drink category during the third quarter ended Sept. 7.
“Gatorade, we feel good about the Gatorade,” Laguarta said in an Oct. 8 earnings call. “Clearly, we learned last year, and we’ve executed better this year. I’m sure that if you ask our customers, they would still (be saying) that we have a way to improve, and I would agree. So, our service levels have improved meaningfully, but still opportunities (that) will get better as we go.”
Propel is proving complementary to Gatorade in certain spaces, Laguarta said. In 2025, the company is planning to introduce Propel Energy Boost, a beverage option to provide energy when consumers “hit that lull in the day,” according to the company. The product is formulated with 100 mgs of caffeine for energy, 250 mgs of citicoline, an ingredient associated with improved mental performance, and electrolytes.
The company also recently introduced Gatorade Hydration Booster, an electrolyte drink mix formulated for all-day hydration, according to the company. The powder is formulated from a blend of watermelon juice, sea salt, sodium citrate and potassium salt. Each packet contains 100% of the daily recommended intake of vitamins A, B3, B5, B6 and C.
The Pepsi brand, led by Pepsi Zero Sugar, delivered net revenue growth for the company, too.
In the PepsiCo Beverages North America (PBNA) business, net revenue of $7.18 billion was up slightly from $7.16 billion in the previous year’s third quarter. Volume was down 3%, and operating profit declined 6% to $914 from $970 million. Core operating profit rose 7%, and core operating margin expanded by 90 basis points, which included a double-digit increase in advertising and marketing expenses. Within PBNA, PepsiCo plans to deemphasize certain low-margin products and package combinations.
Purchase-based PepsiCo companywide in the quarter had net income of $2.93 billion, or $2.13 per share on the common stock, which was down 5% from $3.09 billion, or $2.24 per share, in the previous year’s third quarter. Net revenue dipped 0.6% to $23.32 billion from $23.45 billion. Organic revenue increased 1.3%.
