PepsiCo is adding capacity for Gatorade, which suffered from product shortages last summer amid a spike in demand spurred by higher temperatures and pandemic-related buying. During a recent virtual conference hosted by the Consumer Analyst Group of New York, PepsiCo CFO Hugh Johnston said the company’s capital spending will be “elevated” during the next few years. About 45% of the spending will support “growth capacity,” he said. “We are adding manufacturing lines to capture new demand spaces while also unlocking capacity for constrained products in both snacks and beverages,” Johnston said. “For beverages, we’re looking to secure additional capacity and are developing plans to increase speed to market in order to meet higher service levels for our Gatorade brand.” BD reached out to Gatorade General Manager Brett O’Brien, who confirmed the unit is working on “increased capacity to meet growing demand for products.” He did not share a timeline.
STATE-OF-PLAY. Gatorade shortages last summer were widespread, based on reporting by BD. The shortages appear to have continued into this year, although with less intensity. Gatorade said in August that higher demand during the early days of the pandemic left supplies short heading into an unusually hot summer selling season. “Our hot-fill supply chain is not unlike others in the industry,” a Gatorade spokeswoman said at the time. “We run in-season all out and very tight to our capacity limits.”
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