Pepsi drinks could see more price hikes in the first quarter of 2022

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The prices of Pepsi drinks have been increasing in the past few months, and the company expects more price hikes in the first quarter of next year.

PepsiCo To Hike Prices In Q1 2022

PepsiCo CFO Hugh Johnston has revealed that he expects more price hikes for the company’s drinks in the first quarter of the next year. The company has been increasing the prices of its drinks over the past few years and intends to do so in the coming quarter.

Johnston told CNBC’s “Squawk Box” earlier today that he expects more pricing increase in the first quarter of 2022. He attributes the pricing hike to the rising input costs, which makes it more expensive for the company to manufacture its drinks.

He pointed out that Pepsi’s drinks recorded increased prices during the summer, but their snack prices are now experiencing similar price hikes. The situation is not unique to PepsiCo as other soft drink manufacturers, including Coca-Cola and Proctor & Gamble, have been hiking their prices in recent months. The price hikes were necessary to ensure that the rising input costs don’t affect the companies’ profits.

Similar to other food and beverage companies, PepsiCo purchases its commodities and materials months in advance. However, the rising inflation levels haven’t helped the company at all and have led to the rising cost of production.

Johnston stated that the forward buying could only do so much for the company. It only delays the eventual price hikes by a few months as they will have to adjust prices again if the inflation level keeps rising.

PEP stock chart. Source: FXEMPIRE

PEP Is Up By Less Than 1%

The shares of PepsiCo are up by less than 1% during Tuesday’s pre-market trading session. At the time of writing, PEP is up by 0.20%. PEP is trading at $150 per share, after closing Monday trading around the same level.

Year-to-date, PEP hasn’t performed excellently. It is up by only 3.76%, with the rising inflation affecting its current performance.

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