PepsiCo Inc. beefed up its online grocery game in 2017, reaching $1 billion in e-commerce sales last year, the company said in its year-end earnings call this week.
“We’re increasingly collaborating with retail customers to make e-commerce a point of differentiation for PepsiCo,” CEO Indra Nooyi said on a call with investors discussing its fourth quarter and full-year 2017 results, according to a transcript on SeekingAlpha. “As a result, our e-commerce business is now approximately $1 billion in annualized retail sales, and we are well positioned to capitalize on what is sure to be a dynamic future in this space.”
E-commerce is still a small portion of overall sales at the food and beverage manufacturer. In 2017, online sales accounted for less than 2% of its $63.52 billion in total revenue. Total sales grew 1% last year, and executives said investment in e-commerce helped drive overall growth.
Pepsi’s e-commerce business includes sales through retail sites such as Amazon.com Inc. (No. 1 in the 2017 Internet Retailer Top 500 rankings) and Walmart Inc. (No. 3), as well as direct-to-business and direct-to-consumer operations. It does not sell on Pepsi.com, however, it does sell some products on its other brand sites such as Gatorade.com.
In its third-quarter earnings call, Pepsi said its 2017 e-commerce retail sales were projected to rise 80% in the United States and nearly double in China.
On the third quarter call, executives also said the company has a team of roughly 200 e-commerce employees. In 2015, Pepsi hired Gibu Thomas as its head of global e-commerce. Thomas was formerly Walmart.com’s senior vice president of mobile and digital strategy for four years.
The online food market is far from reaching the level of e-commerce penetration seen in other sectors, such as apparel. But the stakes are much higher in food because the market for groceries is huge—more than $700 billion, according to the U.S. Commerce Department. In 2016, online food and beverage sales grew 31.5% year over year.