Ramon Laguarta, PepsiCo CEO, joins CNBC's 'Squawk on the Street' to discuss the company's most recent earnings, what potential health regulation means for PepsiCo's offerings, and much more.

PepsiCo CEO Ramon Laguarta has confirmed that the company is progressing with plans to remove artificial colors from its product lineup. Currently, 60 percent of PepsiCo's U.S. products do not contain artificial colors, and the company has announced that Lays and Tostitos will transition to zero artificial ingredients by the end of the year. For brands where color is closely tied to consumer perception, such as Doritos and Cheetos, PepsiCo will launch 'naked' versions without artificial colors to gauge consumer response.

Laguarta emphasized PepsiCo's commitment to following consumer preferences and offering a variety of ingredient options, including products with real sugar, no sugar, and corn syrup. He also noted the company's willingness to engage with government discussions on food regulation and ingredient sourcing, particularly regarding the affordability of sugar in the U.S.

PepsiCo CEO: We're exploring removing artificial coloring

And here with us in this CNBC exclusive interview is Pepsi CEO Ramon LaGuardia. Ramon, it's good to talk to you. You know, the street is looking at the numbers better than expected. You've got some revenue growth. The volumes were still down. Tell us what the story is about the quarter, both on food and beverages. Yeah, it's great. Thank you for having me in the program, of course, Sarah. Yes, we're very pleased with our Q2 performance. We've seen an acceleration of the business in the U.S., both in snacks and in beverages. We've seen a continuation of very strong international growth. That business has been very consistent for us. It's a $40 billion business that continues to grow at mid-single digit. In the U.S., we're seeing an acceleration, as we're saying, sequential acceleration. We're seeing more competitiveness in our business. We're more competitive in many of the subsegments of foods and beverages that we participate. We're very pleased with Pepsi. Pepsi, in the cola category, continues to gain share behind non-sugar, behind some of the Pepsi and food advertising. Some of the taste challenge is great. We're seeing good trade gaining share in sports, Propel. And in foods, we're seeing a stabilization of the category. That was our number one priority, stabilizing the salty snacks and the savory snacks category. Now we're growing share in some of the subsegments. We're growing share with Cheetos. We're growing share with Doritos. We're growing share in permissible snacks, which is the large segment. So, pleased, and we think that that sequential improvement will continue over the coming quarters. Why? What changed? Well, nothing has changed. We've been working at strengthening our brands for quite some time. We've been working on finding the right affordability levels for the consumers to stay in our categories. We're continuing to invest in away from home very structurally, and that's a channel where we're seeing incremental locations for our brands. So, it's been more of a strong productivity, consistent productivity, reinvesting in value, reinvesting in the brands, bringing some innovation to the market in the segments of the category where there's growth. And that tends to be more in the functional and in the permissible part of the business, and we're doing quite well there. So, I wouldn't say nothing has changed. It's more of we're continuing to see the results of the things that have been doing for a few years now, and we're getting there. Ramon, it's Jim. Great to have you on the show. Usually, I wouldn't have to speak this way to a CEO, but you've got ends of the government that seem to be very much interested in your business. RFK Jr., precipitating perhaps the idea of a naked chip. The president liking competitors, asking for cane instead of high fructose, where there's really no difference, of course. You've got 60 percent of your product line is in cane. Would you take it to 100 percent, and do you have to have naked everything rather than just Doritos? Yeah, I think, Jim, food and beverage is super important. It's normal that governments pay attention to what people eat and drink, and I think that's fair. We, as a company, have been working on improving the profile of our portfolio for a long time, and we've talked in the past about this. We continue the journey. We follow the consumer, and we're making bold steps. Sixty percent of our products already don't have artificial colors in the U.S., and we will continue that journey of transformation. We announced today that Lays and Tostitos, two of our largest brands in the U.S., will move to zero artificials by the end of the year. That's a big commitment. In the same way, we're starting to launch different platforms in brands that we're less sure of how the consumer will react if we eliminate the colors, and those are Doritos and Cheetos, where we know that our colors are relevant for the taste experience or taste perception. So we will launch subsegments, in this case Doritos naked and Cheetos naked, a line of no artificials and no colors, which we will see how consumers react, and obviously that's good signals on how do we go further. The same thing we're working on, on improving our ingredients. You know, we have 60 percent of our products don't have corn syrup in the U.S. in beverages. Either they have sugar or they have no sugar. So, and we're ready. We offer Pepsi in real sugar and in corn syrup. I mean, Gatorade is a full sugar. There's no corn syrup in Gatorade. So really, a lot of our large options are there for the consumer to choose from, and as always, we have one mantra, which is follow the consumer, be ready with options to satisfy that demand. Well, I mean, if the consumer was the president and he drank PepsiCo and he called you and he said, listen, I really want cane sugar, would you do it? There is obviously an opportunity for a sugar cane. I think some consumers like it. Jim, sugar is more expensive in the U.S. than in many parts of the world. So I think there is a conversation with the government probably on how do we make sugar more affordable in the U.S.? How do we have a farming strategy probably that reduces the cost of sugar? And that will facilitate a lot of the transition for us, for the whole industry. So there is probably a conversation to be had with the government and a strategy to be implemented. But in our case, we have the portfolio, we have sugar, no sugar options, we have corn syrup, we have real sugar. We have choices for the consumer, which at the end, that's what we as a responsible company need to do in the marketplace.

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