Pepsi predicts rise in raw material costs
Aluminum, plastics costs may hit bottling operations
By Dave Hannon -- Purchasing, 2/6/2007 3:10:00 PM
The CEO of Pepsi Bottling Group said raw materials costs in 2007 are expected to be "substantially" higher in 2007, cutting into the company's bottom line.
Eric Foss said the costs of raw materials such as aluminum, sweeteners and drink concentrate could rise by $225 million, more than double the increase of $100 million the company recorded last yea.
According to a company statement, Pepsi “reported a 6% increase in the cost of goods sold per case in 2006. This growth reflects the ongoing upward pressure on the cost of raw materials and the impact of package mix.”
Pepsi Bottling is trying to lower costs by using lighter-weight plastic bottles for some drinks, improving delivery schedules and increasing capacity on beverage production lines, Foss said.
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