Q&A: PepsiCo’s Chad Matthews On Contextualizing Pricing With Analytics
Can you share details around some of the adjustments you've made as a result of these insights?
Through our Pepviz insights, we’ve found that shoppers perceive inflation amongst all food and beverage products to be twice as high as it actually is. In light of this, we’re helping our retail partners think through how to better shape value perceptions to meet the needs of their unique shoppers.
Particularly in an inflationary environment, we need to work even more closely with our partners to determine how we can best retain consumers and drive growth.
How do you measure consumer behavior changes when it comes to pricing?
We’re very closely tuned into consumer behaviors and their underlying attitudes, trying to gauge how perceptions of value impact purchase decisions across their overall baskets. For example, how do consumers view the intrinsic value of enjoying a bottle of Pepsi for $2 as compared to ordering an iced coffee drink at a coffee shop? And then as prices across our direct competitors and across potential substitute or adjacent categories change, how do we see shoppers’ trips and purchase frequency change in response?
There is a need to get very granular in this type of analysis, but at the same time, we try to contextualize our consumers’ behaviors within the broader pinches and tradeoffs they may be making in this macro environment.
When it comes to the impact of these changes, how have you adjusted your pricing strategies?
We have incredibly strong relationships with our retail partners and are constantly analyzing together how we can retain — and even expand — consumers in our categories. The key in this environment has been operating with granularity, offering greater value on the right products to the right consumers.
[See also: PepsiCo Cuts Through Healthy Snack Noise With Mobile Personalization]
Additionally, on the PepsiCo side, we’ve accelerated our cost-management initiatives leaning into our digital innovation and utilized mix and assortment solutions, as recently discussed in our quarterly earnings.
What are some of the KPIs you use to measure success?
At PepsiCo, we approach everything through the lens of our “Faster, Stronger, Better” objectives. We aim to be faster in our growth by winning in the marketplace through our consumer-centric approach and leading on innovation, stronger by transforming our capabilities, value chain and costs, and better by having a positive impact on our planet, our people, and communities.
We’ve found that in keeping these values at the forefront of what we do, we are able to drive success and deliver maximum impact to our partners, consumers, investors and other stakeholders.
How are you working with your bottlers and retail partners to ensure success?
We are committed to empowering our partners with the tools necessary to excel in any environment, and we’ve seen the impact that our insights have had on them. Our dedication to learning and building upon our knowledge of how, when, and where consumers are using our products has been instrumental to the success of our partners, and we look forward to continuing to provide them with the support needed to optimize that success.