The paragraph introduces a question-and-answer session for PepsiCo's 2024 First Quarter Earnings. The Senior Vice President of Investor Relations, Ravi Pamnani, gives a cautionary statement and explains that the company may make forward-looking statements. He also mentions non-GAAP measures and introduces the CEO and CFO who will be answering questions. The operator then introduces the first question from Dara Mohsenian, who comments on the company's strong international profit results.

Ramon Laguarta, CEO of PepsiCo, is pleased with the company's international performance in the last few quarters. He attributes this success to their investments in building scaled businesses in snacks and beverages in key markets, strong innovation, understanding of local food and beverage occasions, and attracting top talent. PepsiCo is also expanding their manufacturing and go-to-market capabilities in countries like Vietnam, China, India, Mexico, and Poland. Laguarta believes that the international business will continue to be a significant source of growth for PepsiCo, as it is already a $36 billion business growing at a high single-digit level with good profitability.

Bonnie Herzog from Goldman Sachs asks about Frito-Lay's op margins in the first quarter, wondering if they will expand in 2024 and if they can return to the low 30% range. Jamie Caulfield mentions that last year's growth is being lapped and they don't want to push the P&L too hard. Ramon Laguarta adds that the long-term goal for Frito-Lay is to continue growing the salty, savory category and gaining share in that market.

In the fourth paragraph, the speaker discusses the high margins of the Frito-Lay business and its role in the overall PepsiCo portfolio. The next question is about PBNA and specifically the performance of Gatorade and Mountain Dew. The speaker mentions that Gatorade had some weather impact in the quarter but is not concerned about its performance for the year. They have the right investments and commercial programs in place to improve market share. Mountain Dew has also seen success with the launch of bubly burst as a permanent flavor.

PepsiCo is focused on improving the profitability of their PBNA business, with plans to deemphasize certain product and package combinations and implement revenue management strategies. These choices are part of their overall goal to deliver profitable growth and expand margins.

The company believes that consumer behavior will continue to be strong, especially in the snacks category. They have seen resilience in the global consumer due to low unemployment and growing wages. However, they are keeping an eye on Chinese consumers who are being cautious and have a high savings rate. The team is focused on gaining market share in China to drive growth. There is also a mention of a more favorable commodities environment, but there may be potential impact from rising diesel prices in the future.

The company is focusing on two types of consumers: the first is the higher income consumer who is more likely to spend on discretionary items, and the second is the lower income consumer who is more budget-conscious and strategic with their purchases. The company is implementing commercial programs and innovation to keep these consumers in their categories and maintain market share. There is no change in the outlook for commodities, with a diverse basket and hedging strategies in place to mitigate any potential inflation. The company expects relatively stable inflation for the rest of the year.

Peter Grom asks for an update on the CELSIUS agreement and Pepsi's energy drink strategy. Ramon Laguarta says the partnership is strong and beneficial for both companies. He also mentions the fast-growing and profitable energy category. The next question is about Frito-Lay's top line trends and volume trajectory. Ramon discusses the tough comp of the year and expects some sequential improvement. He also mentions the cycling of smaller pack sizes and potential impact from the reduction in SNAP benefits from last year.

Ravi Pamnani, Frito-Lay's CEO, discusses the company's strategic objectives of creating occasions for savory snacks and gaining market share. He also mentions that the company's innovation, pricing, and channel mix are all focused on achieving these objectives. Pamnani expects gradual volume improvement in the second half of the year and emphasizes Frito-Lay's role as a guardian of the savory category. He also mentions that the company's goal is for its categories to grow faster than overall food and beverages, making them a profitable partner for retailers.

The company is focused on achieving a balance between growth and profitability for its customers. They expect their categories to continue growing faster than the food and beverage industry due to urbanization and trends in convenient foods and beverages. The company is working on improving their performance in certain countries while maintaining success in others. In Frito-Lay North America, a 4% price mix benefit was driven by both price and mix, with inflationary trends expected to remain moderate for the rest of the year.

The speaker, Ramon Laguarta, discusses the company's customer negotiations and space gains in the spring shelf sets. They feel good about the overall performance and are reaffirming their guidance for the year. In response to a question about the APAC division, Laguarta mentions being cautious about the Chinese consumer, but the division saw double-digit growth in China during the quarter. He clarifies that the results may be due to timing rather than a long-term trend.

The speaker addresses two questions regarding the impact of lower income consumers and the shift from at-home to away-from-home consumption on their global business. They mention that the APAC region is improving, but China is still cautious and saving. The company has been consistently gaining share and creating a profitable business in China for the past few years. They also mention that away-from-home consumption is growing faster than in-home, and they are pivoting resources to capture this trend. They see potential for growth in international markets by improving availability and creating new solutions for meal replacement.

The speaker, Ramon Laguarta, is responding to a question about the recent unexpected slowing in certain categories, such as savory snacks and sweet snacks. He explains that this may be due to pressures on lower-income consumers and the shift towards at-home consumption. However, he remains optimistic due to the growth in wages and the fact that consumer packaged food inflation is below total CPI.

The speaker discusses two important numbers that indicate consumers will return to their categories at a high frequency. They are confident in the price volume mix of their business and their goal is to drive value for their company and customers. They also mention managing international profit delivery to provide affordability to consumers and support recruitment, and are conscious of the value of their products compared to others in the market.

The speaker discusses the opportunities for growth in the snack and beverage industry, with a focus on transforming and packaging snacks and expanding into commercial beverages. They also mention the importance of affordability and value in driving growth, and how their margins are expanding internationally due to gaining scale. The speaker then addresses a question about Europe, noting that the region has seen seven consecutive quarters of double-digit revenue growth and mentioning the strong performance of developed markets compared to the US.

The company has implemented a successful flywheel strategy in Europe, driven by productivity, cost control, and reinvestment in brands and markets. This strategy is also being applied globally, with a focus on digitalization and sustainability. The company's CEO expresses confidence in the company's performance and thanks investors for their support.

The speaker expresses their gratitude for the operator's assistance and the operator responds with "you're welcome."

This summary was generated with AI and may contain some inaccuracies.