Analysis of this article. How does this affect the economy and lives. Scarcity?, positive/normative statements?, fallacies?, law of supply and demand?, shortages/surpluses?, price changes? etc.

Wall Street Journal Text:

PepsiCo Juggles Strong Demand and Supply-Chain Challenges

PepsiCo Inc. PEP +0.68% said it raised its guidance for the full year amid strong sales growth of its Mountain Dew, Doritos and other snacks, while the company faces continuing supply-chain disruptions and increased costs for aluminum cans, plastic bottles, labor and trucking.

PepsiCo and other consumer-goods companies are logging higher demand from shoppers as the global economy recovers from the initial shocks of the Covid-19 pandemic and restaurants, stadiums and other venues reopen. But the recovery has also been hampered by production and transportation challenges.

The snacks-and-beverage giant on Tuesday said it expects organic revenuea metric that adjusts for items such as foreign-exchange translation, acquisitions and divestituresto grow about 8% for fiscal 2021. It previously expected organic revenue to grow 6%. The higher outlook reflects rising volumes, as well as planned price increases.

PepsiCo will continue to pass on its higher costs to consumers with price increases this fall and early next year, finance chief Hugh Johnston said. Consumers around the world are more willing to accept price increases now than they were in the past, said Chief Executive Ramon Laguarta, perhaps in part because they are shopping more quickly in stores and might not be looking as closely at price tags.

Executives said new flavors and varieties like Doritos 3D Crunch, Cheetos Crunch Pop Mix and Mtn Dew Flamin' Hot helped drive sales growth in the quarter. The company plans to introduce an alcoholic Mountain Dew drink early next year in a partnership with Boston Beer Co. ; that will be followed by other alcoholic drinks now under development, Mr. Laguarta said Tuesday on a call with analysts.

The Purchase, N.Y.-based company sees core constant currency earnings per share growth of at least 11%, compared with its prior outlook of 11%. The company expects core EPS to grow at least 12%, compared with its previous guidance of 12%.

Food companies have said they are paying more for ingredients and materials, including cooking oil and steel, as costs rise for freight, fuel and labor, too.

For the quarter that ended Sept. 4, PepsiCo posted net revenue of $20.19 billion, up 11.6% from the same period last year and beating expectations of analysts polled by FactSet.

However, profit fell to $2.22 billion from $2.29 billion as costs increased. Selling, general and administrative expenses rose to $7.64 billion from $6.92 billion.