Ramon Laguarta: No, listen, I’ll start and maybe Jamie can add to this. The — listen, the international opportunity continues to be by the most remarkable and exciting opportunity that we have as a company. As you’re saying our international business is very scaled now. It’s almost $40 billion between beverages and snacks. So that’s, if you compare it to some of the consumer goods companies, it’s much bigger than many of the consumer goods companies globally. So clearly a big opportunity, and we have just scratched the surface when you think about the per capita consumption that we have in many markets and the opportunity we have ahead of us. So here’s your point you’re right. As we scale it, some of those businesses are becoming more profitable and obviously you start the virtuous circle of scale, reinvestment, margin expansion, and getting to a much more profitable and advantage businesses across many markets.
So this year is not going to be a different one. So ‘24, we continue to think that international will grow faster than the U.S. business. We’re seeing good momentum as we start the year in many of our international businesses. Our position is of investment in those markets, so we’re going aggressively with productivity and reinvestment for growth, reinvestment in the brands, reinvestments in systems, in capabilities that continue to drive the per caps and our share of market position. So you should think about our international business as a big opportunity for PepsiCo. And with regards to the Argentina situation, it’s, yes, we’ve already taken that hyper accounting and you shouldn’t expect any material impact on organic sales growth.
Operator: Thank you. [Operator Instructions] Our next question comes from Dara Mohsenian with Morgan Stanley. Your line is open.
Dara Mohsenian: Hey, good morning, guys, and Jamie, great to hear your voice again.
Jamie Caulfield: Hey, Dara.
Dara Mohsenian: So I wanted to drill down a bit more on Bonnie’s question, but looking at PBNA top line more than profit, there’s clearly been some market share struggles and pieces of the portfolio there, sports strength, CSDs, et cetera. So I guess can you just talk a little bit more about strategy changes from a top line standpoint. How you sort of manage the business by product category? And your thoughts around share trends as we look going forward? Thanks.
Ramon Laguarta: Hi there. Good, listen, we feel good about the overall portfolio of PBNA. You know, we manage the business as a full LRB business, not as a CSD or any particular subcategory. We’re looking at, you know, the full portfolio and how it’s always everywhere for consumers from the morning to the night in all the multiple locations. We continue to believe that we have an advantage portfolio. If you think about our positions in sports and hydration, our positions in coffee, tea, now the portfolio we have in energy, and our CSD position as well. So we continue to manage as a full LRB. Now, if you think about our priorities for the year, relaunch of Pepsi brand with a new image with focus on Zero. Zero has been growing very fast and continues to be an advantage proposition for us.
We are putting a lot of additional investment in Mountain Dew, and we’re launching Baja Blast as a permanent SKU. Baja Blast has been a success as an LTO, a limited time offer. For many years now, we’re launching it. We’re using the Super Bowl as a platform this weekend to launch Baja Blast. We continue to build a position in Lemon Lime with Starry. Starry, it’s been a good first year. I think we had — we’re over indexing with Gen Z. We see the brand getting some good repeat. You will see also an investment around Super Bowl and continue during the year. So that’s our CSD portfolio. We feel very good about Gatorade. Gatorade is, we’re moving from historically a liquid for high performing athletes to an ecosystem of solutions in hydration and fuel for every type of active person.
And we’ve seen a lot of traction. It’s not only Gatorade per se, but it’s Gatorlyte, it’s GFit, it’s Propel, it’s Muscle Milk, all under one umbrella. And it’s not only liquid solutions, it’s powders, it’s tablets, it’s equipment, personalized equipment, bottles, and others. And now we’re launching around the Super Bowl Gatorade ID, which is also an ecosystem of loyalty and I would say personalization for our consumers that will bring even more attention to the brand and more loyalty with younger consumers. On energy, we’re very happy with our portfolio. Obviously the Starbucks coffee energy on one side, Rockstar, and obviously our collaboration with CELSIUS, which has been a great success, and it provides scale to our go-to-market and kind of a point of entry as well with some of our customers.
And then our tea business continues to very well with Pure Leaf and our Starbucks collaboration now moving more into beyond coffee, I would say more refreshers and some other innovation that Starbucks is developing for their cafes and we bring it to ready to drink. So I think we have a beautiful portfolio. We continue to grow in retail and we’re putting a lot of focus in away-from-home as we’re seeing that the away-from-home channel is getting much more traffic as people go back to normal mobility and that will be a focus for us going forward. This year we think we’ll continue to grow above the market and continue to gain share in what is a very profitable and high growth channel. So this is how we’re thinking about the business there. Hopefully it gives you a good sense of the intentionality, how we’re thinking about the broad portfolio and our willingness to compete with innovation, with brand investment and with great execution.
Operator: Thank you. [Operator Instructions] Our next question comes from Peter Grom with UBS. Your line is open.
Peter Grom: Thanks, operator, and good morning, everyone. Ramon, I just wanted to ask a follow-up based on your response to both Bryan and Lauren’s question on the organic growth. And I may have misheard or could be misinterpreting this, but you touched on some of the things that you are doing internally that will drive the improved performance. But I think you also mentioned some sort of assumption around maybe the U.S. consumer would feel better. I mean, if that doesn’t happen, would that put the organic revenue guidance at risk or would an improved backdrop be more of a source of upside versus the greater than 4%? Thanks.
Ramon Laguarta: The current assumption is what I said. We think that the consumer will continue to improve in its confidence and its disposable income throughout the year. And that’s the ongoing assumption. We have a very strong productivity program in the company, which gives us the fuel for investment, and it gives us also a lot of flexibility to manage a potential different consumer reality. But at this point, we think this is the ongoing assumption who will invest in our brands, who will invest in our innovation. And now that supply chain is in a very good place, compared to what it was a couple of years ago, even last year, we can rely on the tools that we’re very good at, which is brand building, innovation, execution, distribution increases, strong commercial programs with our partners, and that’s where we think we’ll drive the growth of our top line here.
Jamie Caulfield: Yes, and I’d add just to remind you, 40% of our business is now international. So, you know, the U.S. is significant, but we’ve got a big business outside the U.S.
Operator: Thank you. [Operator Instructions] Our next question comes from Gerald Pascarelli with Wedbush. Your line is open.
Gerald Pascarelli: Great. Thanks very much. Ramon, I have a question on energy drinks. Can you just speak about your plans to maybe drive performance in Rockstar this year? It’s kind of been a relative underperformer in energy drinks for some time and now you have bang coming back into the market, which could potentially result in some incremental disruption. So maybe just some color on how you’re thinking about driving an improvement in Apron and then maybe broader thoughts on the competitive dynamics within energy drinks this year? Thank you.
Ramon Laguarta: Yes, I mean, it’s a great question. The energy category continues to grow, as you see, above the LRB category. So continues to expand into new consumers and new consumer locations, which obviously creates growth for everyone that participates in the category. So we participate, as always said, with multiple vectors. We’re proud of our Starbucks partnership and some of the products we offer, double shots, triple shots. We’re proud of the Rockstar brand. Rockstar has been growing with the category. More or less, there are some parts of the country where it’s well distributed and well preferred. Other parts of the country we’re trying to get consumer penetration and consumer adoption. The areas where we’ve been successful with Rockstar, which we will double down, are the zero and are the recover parts of the portfolio.
Both of them, if you think is energy with functionality and where we think our R&D can create advantage. So we’re pushing those two platforms, Rockstar Zero and Rockstar Recover, and that will continue to be the focus of the brand. We’ve also been focusing on Hispanic consumer, and that also we’ve seen an increase in the penetration of the brand with Hispanic population, with Hispanic consumers will continue to drive that commercial activity. But we see this as a portfolio of solutions, including sales use and how the combined portfolio creates a very good point of execution for us, multi-brand, it gives us an entry into convenience stores and some other points of sale away-from-home and will continue to drive the portfolio as the unit of execution.
Operator: Thank you. [Operator Instructions]
Ramon Laguarta: I forgot, maybe I can say. The other thing we’re doing with Rockstar, which we don’t talk a lot about it, it’s an important part of our growth, is we’re launching Rockstar internationally in many markets around the world, from Asia to Europe to parts of Latin America, and we’re having good success, again, as a portfolio of solutions that complements our Sting brand that we have in Asia or some other brands that we have in Europe as well.
