Pepsi CEO predicts a second wave of coronavirus cases, warning against forecasts of linear recovery as states and countries reopen

AP Photo/Paul SakumaPepsiCo expects ‘ups and downs’ in coronavirus recovery.
  • PepsiCo is preparing for “ups and downs” as states and countries reopen in the coronavirus pandemic, with CEO Ramon Laguarta highlighting the potential for second waves of COVID-19 cases.
  • “The chances of every country opening up and every state opening up and not having second waves, I think, are low. … Until we have treatments and we have vaccines, we should be very cautious,” Laguarta said on Tuesday.
  • While fewer people are buying Pepsi beverages in gas stations and convenience stores during the pandemic, Laguarta said shoppers are stocking up on breakfast foods and snacks as they search for “moments of enjoyment during this confinement.”
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As states and countries allow businesses to reopen after coronavirus closures, PepsiCo is warning against assumptions that economic recovery will be linear.

PepsiCo CEO Ramon Laguarta said on a call with investors on Tuesday that the company expects “ups and downs,” with the potential for second waves of COVID-19 cases and new decisions about lockdowns.

“We don’t think it’s going to be a straight line once people go back to moving around … with potential second waves in some particular markets,” Laguarta said.

PepsiCo reported on Tuesday that organic revenue grew 7.9% in the first quarter, as shoppers stocked up on breakfast and snacks during the coronavirus pandemic. According to Laguarta, sales of multi-packs and variety packs of snacks are soaring as people seek “moments of enjoyment during this confinement.”

At the same time, the pandemic is cutting into PepsiCo’s beverage sales in gas stations and convenience stores, as well as business at restaurants that serve Pepsi products. PepsiCo announced on Tuesday it would withdraw its outlook for fiscal 2020 due to the continuing uncertainty.

“The chances of every country opening up and every state opening up and not having second waves, I think, are low,” Laguarta said in Tuesday’s call.

“We don’t have treatments and we don’t have vaccines,” Laguarta added. “So until we have treatments and we have vaccines, we should be very cautious.”

Laguarta said that individuals’ actions will determine if areas are contaminated or not, as states and countries’ ease shelter in place orders. The CEO said that PepsiCo needs to be extremely agile and prepared for various scenarios.

“We need to be careful we don’t project straight lines when states open,” instead anticipating non-linear recovery, Laguarta said.

Concerns about second waves of the coronavirus does not mean that PepsiCo is playing it safe. Laguarta said that the company plans to be “extremely aggressive” as regions reopen for business.

“We want to be first knocking on the door” when stores open, stocking shelves with snacks and filling coolers with beverages, Laguarta said.

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