Where Are Junk-Food Companies Making Money? Emerging Markets

As U.S. sales slow, McDonald's, PepsiCo, and Coca-Cola are sustaining themselves by exporting unhealthy products

The second quarter financial results are in and food companies are doing great, thanks to sales in developing countries. For example:

McDonald's:

Meatandpoultry.com reports (July 22) a 15 percent increase in income "boosted by strong sales throughout the world." Total revenue for the quarter was $6.9 billion, up 16 percent from $5.9 billion during the same quarter last year.

PepsiCo:

Food Navigator reports an increase in net income to $1.88 billion up 18 percent from $1.6 billion last year. Despite "challenging conditions in the North American beverage market," worldwide beverage and snacks businesses accounted for growth along with the acquisition of Russian dairy and juice company Wimm-Bill-Dann. Sales in emerging markets increased 4 percent in beverages and 9 percent in snacks: "We continue to enjoy robust top-line growth in key emerging markets," said PepsiCo chairman and CEO Indra Nooyi.

Coca-Cola:

Although its North American sales were sluggish, sales increased "due to growth in emerging markets such as China, Russia and Mexico." Income rose 18 percent to $2.8 billion from $2.4 billion last year. Sales rose 6 percent in Latin America, 5 percent in Europe, 7 percent in Eurasia and Africa, and 7 percent in the Pacific region. Growth in China was 24 percent, in Russia 17 percent, and in Mexico 7 percent. In contrast, North American volume recorded a growth of a measly 1 percent.

Americans are turning away from these products. We already have plenty of obesity. Now it's time to export it.

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This post also appears on Food Politics.
Image: Fredrik Renander/Reuters