PepsiCo’s Frito-Lay (PEP) to expand capacity at its Rosenburg plant
PepsiCo, IncFrito-Lay, PEP’s main snack division, has partnered with Fort Bend County to invest in the Rosenberg, Texas plant. The $ 200 million investment is likely to increase the capacity of its warehouse and also add production lines for Funyuns and tortilla chips. This new development, which is expected to be completed by 2023, will create 160 full-time jobs.
Notably, the facility currently has over 750 full-time plant and fleet associates. Being the unit’s largest factory in Texas, it produces over 117 million pounds of snacks annually for Texas, Louisiana, Oklahoma, Kansas and Georgia and other parts of the United States. Previously, Frito-Lay had invested $ 138 million in the Rosenburg plant, where a new Cheetos line was added as well as new seasoning, packaging equipment and warehouse expansion. This project should be completed at the end of 2021.
The latest move can be attributed to the continued demand for home breakfast and light snack trends, which have helped the Frito-Lay business. Notably, Frito-Lay gained market share in the macro snacks and savory snacks categories. Its revenues reflect gains from continued efforts to refresh flavors and introduce consumer-centric innovations like Doritos 3D Crunch and Cheetos Crunch Pop Mix. Revenue growth for all major brands, including Ruffles, Tostitos, Doritos and Lay’s, were key drivers.
What else should you know?
PepsiCo benefited from the resilience and strength of its global snack and food business, as well as growth in the beverage category. It also leveraged its strong brand portfolio, responsive supply chain and flexible go-to-market systems. On an organic basis, first quarter 2021 revenue increased 2.4% year on year, with unit volumes up 1% and 2% for the snack / food and beverage businesses, respectively. Going forward, management expects mid-digit organic revenue growth, with high-digit basic constant exchange rate EPS growth.
Strong home consumption trends in North America have contributed to the growth of the beverage segment. In particular, it generated strong double-digit revenue growth for the energy portfolio, including acquisitions, and single-digit growth for Gatorade sports drink. Additionally, brands like Bubbly, Starbucks, Mountain Dew, Gatorade and Pepsi saw strong growth in the first quarter of 2021. Additionally, market share trends for the liquid refreshing drink category improved, with gains of part in soft drinks, teas, juices and sparkling wines. categories of water. Additionally, the company is witnessing strong trends in the energy drink category, with the launch of Mountain Dew Rise Energy and efforts to revitalize Rockstar products.
Additionally, the company remains on track with its cost containment efforts to streamline the organization and optimize its manufacturing and supply chain footprint. In 2019, the company achieved over $ 1 billion in productivity savings, keeping it on track with its goal of generating productivity savings of at least $ 1 billion per year up to in 2023. The company plans to achieve this productivity objective thanks to the savings generated by the restructuring actions. Savings from productivity and restructuring plans are expected to increase sales and margins in the short term.
Over the past three months, shares of this company Zacks Rank # 3 (Hold) have gained 10.4%, outperforming industry growth by 7.4%.
Image source: Zacks Investment Research
Actions to consider
Compania Cervecerias Unidas, SA. CCU has an expected long-term earnings growth rate of 11% and currently a Zacks Rank # 2 (Buy). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
Fomento Economico Mexicano FMX, also a stock of Zacks Rank # 2, has a long-term earnings growth rate of 9.3%.
Nomadic foods NOMD, currently ranked 2 in Zacks, has a surprise four-quarter profit of 10.3%, on average.
Boom in infrastructure stocks will sweep America
A massive push to rebuild crumbling American infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.
The only question is, “Are you going to jump into good stocks early when they have the greatest potential for growth?” “
Zacks published a special report to help you do just that, and today it’s free. Discover 7 special companies looking to make the most of the construction and repair of roads, bridges and buildings, as well as transporting goods and transforming energy on an almost unimaginable scale.
Download FREE: How to Profit from Trillions in Infrastructure Spending >>
Click to get this free report
Fomento Economico Mexicano SAB de CV (FMX): Free Stock Analysis Report
PepsiCo, Inc. (PEP): Free Inventory Analysis Report
Compania Cervecerias Unidas, SA (CCU): Free Stock Analysis Report
Nomad Foods Limited (NOMD): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks investment research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.