PepsiCo plans to rename Lay's and Tostitos without artificial dyes and flavours

PepsiCo (PEP.O), opens new tab, plans to highlight what will no longer be in its potato or tortilla chips - artificial colours or flavours - when it relaunches its Lay's and Tostitos brands later this year, executives said Thursday.

The revamp of the company's best-selling snack brands comes as US Health Secretary Robert F. Kennedy Jr. encourages Americans to eat "whole foods" and forces producers to eliminate dyes.

Under pressure from Kennedy and the Make America Healthy Again (MAHA) social movement, US food manufacturers have announced intentions to remove dyes from their goods and replace them with new ones that are colourless.

"We're attempting to improve the genuine food perception of Lay's. "If you think about the simplest and most natural snack, it is a potato chip; it's a potato, oil, and a little bit of salt—the simplest, no artificial ingredients," stated CEO Ramon Laguarta during an investor call.

The firm also stated that it would be using more avocado and olive oil across its brands instead of canola or soybean oil. The MAHA movement has questioned the health advantages of specific dietary oils.

In April, PepsiCo announced plans to transition its whole portfolio to natural colours, or to provide consumers the option of a product free of synthetic dyes. Its brightly coloured Cheetos snacks and Gatorade beverages are made using synthetic colours.

It already sells Lay's and Doritos without artificial colours or flavours under the Simple label.

"The Simply line extension for existing chip brands is still in its early stages; consumers have not yet engaged, and it will be interesting to see how consumers react to a rebranding of Lay's and Tostitos over the next few quarters," said Christian Greiner, F/m Investments senior portfolio manager.

COSTLY, PREMIUM PRODUCTS?

On Thursday, the soda pop maker also stated that it would utilise sugar in its products, such as Pepsi beverages, if customers requested it.

On Wednesday, President Donald Trump said that Coca-Cola will begin using cane sugar in its beverages in the United States, which is a dietary preference of Kennedy's MAHA movement. Both Pepsi and Coke employ high-fructose corn syrup in their sodas, which is typically less expensive.

The initiatives come at a time when packaged food businesses, such as PepsiCo, are seeing consumers cut down on spending after the sector boosted prices in the years since the COVID-19 outbreak to protect margins.

To fulfil the need for affordable snacks, PepsiCo has increased the number of goods available at lower prices and in smaller pack sizes in its food category.

"While there is clearly demand for cleaner ingredients in food and beverage products, it remains to be seen if consumers will be willing to pay up for these more premium products, especially in today's inflationary environment and more price-sensitive consumer base," Arun Sundaram, a CFRA Research analyst, stated.

Laguarta also announced on Thursday that the company would join the "liquid protein" industry, as protein shakes become increasingly popular.

He also announced that the company would be offering protein choices to its PopCorners popcorn and Quaker snacks.

Source: Reuters

PepsiCo plans to rename Lay's and Tostitos