Soda Prices Are About To Pop

PepsiCo Inc. will likely hike prices early next year.

Look, I'm no Suze Orman. I'm not gonna sit here and lecture you about the perils of spending your hard-earned dollars on soda. Personally, I shell out an obscene amount of money for the sheer pleasure of having someone else make my coffee in the mornings. Life's short, and I'm lucky enough to have some extra pennies to spend on beverages. But those pennies may be a bit stretched next year: PepsiCo Inc just announced that it would likely raise prices early next year to overcome what Reuters calls "ever increasing supply-chain challenges that include everything from a shortage of Gatorade bottles to a lack of truck drivers."

Hugh Johnston, PepsiCo Inc's chief financial officer, reportedly told Reuters that PepsiCo had to "scramble" to overcome a shortage of cans and Gatorade bottles in the last few months. This is due in part to ongoing product shortages, but Reuters also points out that demand for the company's beverages "jumped at restaurants and theaters following the lifting of pandemic-induced restrictions." PepsiCo's UK business was also affected by the post-Brexit truck driver shortage.

In response, PepsiCo has actually already raised soda and snack prices in hopes of boosting product margins. Johnston told Reuters that he "expects some price increases in the first quarter of next year" as the company continues to "fully absorb and lock down the impact of commodity inflation." Johnston's hope is that late 2021 will mark the beginning of the end of pandemic-related supply-chain disruptions. That seems like wishful thinking given the sheer magnitude of the issue; fortunately, PepsiCo doesn't seem to be facing any significant product shortages in the interim. If you're committed to cracking open a cold Pepsi at the end of the day, you might want to start gathering your pocket change.