PepsiCo may implement price hikes on its products as raw material costs soar

PepsiCo said this week that it might impose higher prices for its snack and soda products. The beverage and snack maker revealed its products may get pricier because of the increasing cost of raw materials and steady demand.

As per Fox Business, PepsiCo indicated on Tuesday, July 12, that there is a possibility for another price hike for its snacks and beverages as the decades-high inflation has been causing the prices of raw materials to continuously go up.

Hugh Johnston, the company's chief financial officer, said the consumers have so far been unflinching despite the previous price hikes that were implemented last year. Now they can expect more increases from PepsiCo, which are unavoidable due to the current economic situation.

Then again, the CFO said that they are also looking for ways to cut costs and keep the prices as low as possible. One of the things that PepsiCo is considering is using cheaper packaging.

"In a world where we are seeing things like vegetable oil, grains, and packaging prices increasing dramatically, I would be surprised if there wasn't more price increase over the course of the next year," the PepsiCo CFO stated.

In a separate statement made via CNBC's "Squawk Box," Johnston added, "We are facing inflation like everyone else, and we think that is going to persist for a while, but we are taking enough pricing to be able to manage the inflation, and our focus is really much more on how do we drive costs out of the business."

In any case, PepsiCo is expecting the costs to go up even higher in the second half of this year, and this means the company will have more expenses too. While the price increase on its products is imminent, the company is doing what it can to keep the prices down. Aside from shifting to cheaper packaging, it is also thinking of reducing product sizes so items will still be affordable.

Meanwhile, Reuters reported that PepsiCo's net revenue for the second quarter rose by 5.2% to $20.23 billion. The numbers effectively quash the estimates of $19.51 billion.