PepsiCo, which is seeing Americans eating more breakfast and snacks at home and buying fewer drinks on the go, is being a bit cautious when it comes to its marketing spending during the coronavirus pandemic.
The food and drink marketer had raised its advertising and marketing spending in the first quarter. But now, it is “reducing nonessential advertising and marketing spend to reflect the realities of the current environment,” Chief Financial Officer Hugh Johnston said on a pre-recorded call Tuesday.
PepsiCo's first-quarter sales rose nearly 8 percent and would have gone up more than 5 percent even without the rush to stock up on groceries at the end of the period, which closed on March 21, the company said.
Chairman and CEO Ramon Laguarta outlined four stages of emotional and behavioral changes PepsiCo sees for consumers in developed markets such as the U.S., where many people are still staying home. “The first is preparation and prevention, the second is confinement and cocooning, the third is a restricted recovery and the fourth is a new normal,” Laguarta said on the pre-recorded call. Most developed markets have made it into the latter stage of the second phase, he said. Later, on a call with analysts, Laguarta said the chances of every country and state opening up and not having second waves of COVID-19 “I think are low.”