PepsiCo (PEP) chairman and CEO Ramon Laguarta isn't a fan of the ultra-processed food label being increasingly slapped onto big food makers.
"I don't like the word ultra-processed, and I don't believe in it," Laguarta told Yahoo Finance Live in an exclusive interview at the World Economic Forum in Davos, Switzerland, on Tuesday. "I think we are using kitchen logic to define our product."
Laguarta explained PepsiCo continues to look for ways to make its products better for consumers, in part fueled by one of his primary leadership principles: big changes to big things.
Those big efforts range from furthering zero-sugar drink options, improving ingredients in Frito-Lay snacks, and developing smaller package sizes.
Added Laguarta: "We have to bring clarity to what is ultra-processed. I don't think our products are ultra-processed."
In the meantime, Wall Street has continued to weigh in — mostly by putting pressure on the stock prices — on the impact on Big Food companies from the rising popularity of weight-loss drugs.
Laguarta said the adoption of weight-loss drugs such as Novo Nordisk-made (NOV) Ozempic won't happen overnight. PepsiCo will continue to evolve its portfolio of products to support changing consumer behaviors.
To be sure, Ozempic and other weight-loss drugs didn't slim down third quarter results for PepsiCo.
The maker of Pepsi soda and Lays chips hammered Wall Street profit estimates, with the company notching sales gains in all its business segments, save for Africa/Middle East.
PepsiCo set its 2023 organic sales growth to 8.8%, compared to estimates of 8.3%. Earnings for the year are expected to rise 16%.
For 2024, the company has outlined another year of double-digit EPS growth.
PepsiCo's full year 2023 results and any updates to guidance will be announced in February.
"We expect 'GLP-1 fears' to remain an overhang on the stock even as management executes with precision. We note that this fear is likely overdone, with PepsiCo under-indexing to East and West Coast consumers, where we suspect GLP-1 usage is likely highest. PepsiCo is delivering results well above its long-term outlook as pricing takes hold with modest impact from elasticities to date," Evercore ISI analyst Robert Ottenstein said in a client note reviewed by Yahoo Finance.
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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
