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Reference Code : 2D95A557-82B0-4089-986A-49989FAA8ED4 Publication Date: January 2015
PepsiCo, Inc.
700 Anderson Hill Road
Purchase
New York 10577
United States
Fax: 1 914 253 2070
Phone: 1 914 253 2000
Website: www.pepsico.com
Industry: Consumer Packaged Goods
Overview
PepsiCo, Inc. (Pepsi or 'the company') is a global consumer goods company, primarily engaged in production,
marketing and sales of a variety of food, snacks and beverage products. The company operates in the
Americas, Europe, Asia, the Middle East and Africa. It is headquartered in New York and employed about 274,000 people as of December 28, 2013.
The company recorded revenues of $66,415 million in the financial year ended December 2013 (FY2013), an
increase of 1.4% over FY2012. The operating profit of the company was $9,705 million in FY2013, an increase of 6.5% over FY2012. The net profit was $6,740 million in FY2013, an increase of 9.1% over FY2012.
SWOT
Strengths Weaknesses
Strong market position
Diverse product portfolio and strong brand equity
Widening presence in the emerging markets
Market controversies could hamper consumer confidence
Opportunities Threats
Increasing spending on food in emerging markets
Increasing local-focus
Changing consumer preferences creating opportunities in the health and nutrition space
Rising competition from private labels is posing a threat to national brands
Water scarcity and poor quality could impact production costs and capacity
Rising labor wages and healthcare costs in the US
Key Employees
Employee Name Job Title Board
Indra K. Nooyi Chairman and Chief Executive Officer Executive Board
Albert P. Carey Chief Executive Officer, PAB Senior Management
Cynthia M. Trudell Executive Vice President and Chief Senior Management
COMPANY SNAPSHOT
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
PepsiCo, Inc. (Pepsi or 'the company') is a global consumer goods company, primarily engaged in production,
marketing and sales of a variety of food, snacks and beverage products. The company operates in the
Americas, Europe, Asia, the Middle East and Africa. It is headquartered in New York and employed about 274,000 people as of December 28, 2013.
The company recorded revenues of $66,415 million in the financial year ended December 2013 (FY2013), an
increase of 1.4% over FY2012. The operating profit of the company was $9,705 million in FY2013, an increase of 6.5% over FY2012. The net profit was $6,740 million in FY2013, an increase of 9.1% over FY2012.
PepsiCo, Inc.: Key Facts
Table 1: PepsiCo, Inc.: Key Facts
Corporate Address: 700 Anderson Hill Road
Purchase
New York 10577
Country: United States
Fax: 1 914 253 2070
Phone: 1 914 253 2000
Web Address: www.pepsico.com
Turnover (US$m): 66,415
Employees: 274,000
Financial Year End: December
Industry: Consumer Packaged Goods
Primary Stock Exchange (Ticker): New York Stock Exchange, Inc. (PEP)
SOURCE: MARKETLINE
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Ms. Nooyi has been the Chairman at Pepsi since 2007 and the Chief Executive Officer since 2006. She was
elected to Pepsi's Board and became the President and Chief Financial Officer in 2001 after serving as a Senior
Vice President and the Chief Financial Officer from 2000. Ms. Nooyi also served as the Senior Vice President of
Corporate Strategy and Development from 1996 to 2000 and as the Senior Vice President of Strategic Planning
from 1994 to 1996. Prior to joining the company, she spent four years as the Senior Vice President of Strategy,
Planning and Strategic Marketing for Asea Brown Boveri. Earlier, Ms. Nooyi was a Vice President and the Director of Corporate Strategy and Planning at Motorola from 1986 to 1990.
Board: Executive Board
Job Title: Chairman and Chief Executive Officer
Salary (US$): 14,280,877
Since: 2007
Age: 58
Albert P. Carey
Mr. Carey has been the Chief Executive Officer of PAB, a business division of Pepsi, since 2011. Prior to that,
he has been the President and Chief Executive Officer at FLNA from 2006 to 2011. Mr. Carey began his career
with Frito-Lay in 1981 where he spent 20 years in a variety of roles. He served as the President, PepsiCo Sales
from 2003 until 2006. Prior to that Mr. Carey served as the Chief Operating Officer, PepsiCo Beverages and
Foods North America from 2002 to 2003 and as Pepsi's Senior Vice President, Sales and Retailer Strategies from 1998 to 2002.
Board: Senior Management
Job Title: Chief Executive Officer, PAB
Since: 2011
Age: 62
Cynthia M. Trudell
Ms. Trudell has been the Executive Vice President of Human Resources and Chief Human Resources Officer at
Pepsi since 2011. Prior to assuming this role, she served as a Senior Vice President and the Chief Personnel
Officer at Pepsi from 2007 until 2011. Ms. Trudell also served as a Director at Pepsi from 2000 to 2007. She was
formerly a Vice President at Brunswick Corporation and the President at Sea Ray Group during 2001-06. From
1999 until 2001, she served as a Vice President at General Motors (GM) and as the Chairman and President at
Saturn Corporation, a wholly owned subsidiary of GM. Ms. Trudell began her career with the Ford Motor Co. as
a Chemical Process Engineer. In 1981, she joined GM and held various engineering and manufacturing supervisory positions.
Board: Senior Management
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Job Title: Executive Vice President and Chief Human Resources Officer
Since: 2011
Age: 60
Enderson Guimaraes
Mr. Guimaraes has been the Executive Vice President, Global Categories and Operations at Pepsi since
December 2014. Prior to assuming his current position, he served as the Chief Executive Officer of PepsiCo
Europe from 2012. Mr. Guimaraes also served as the President, Global Operations at Pepsi from 2011. In the
past, he was an Executive Vice President at Electrolux and as the Chief Executive Officer of its major appliances
business in Europe, Africa and the Middle East. Earlier, Mr. Guimaraes served at Philips Electronics for 10 years
in various roles, including Regional Marketing Executive, Brazil; Senior Vice President and Head of Global
Marketing Management and General Manager of the company's WidiWall LED display business. He also served
as the Chief Executive Officer of Philips' Lifestyle Incubator group, an innovation engine which created new
businesses and developed them over several years. In the past, Mr. Guimaraes also served in various marketing positions at Danone and Johnson & Johnson.
Board: Senior Management
Job Title: Executive Vice President, Global Categories and Operations
Since: 2014
Age: 54
Hugh F. Johnston
Mr. Johnston has been an Executive Vice President and the Chief Financial Officer at Pepsi since 2010. He
joined the company in 1987, and has served in a variety of positions, including Chief Financial Officer,
Beverages and Foods, Pepsi; Senior Vice President, Mergers and Acquisitions, Pepsi; President, Pepsi-Cola
North America Beverages; and most recently Executive Vice President, Global Operations, Pepsi. Prior to joining Pepsi, Mr. Johnston served at General Electric Company in a variety of finance positions.
Board: Senior Management
Job Title: Executive Vice President and Chief Financial Officer
Salary (US$): 9,797,279
Since: 2010
Age: 52
Jon Banner
Mr. Banner has been the Executive Vice President, Communications at Pepsi May 2014. He previously served
as the company's Senior Vice President for global strategy and planning. Prior to joining Pepsi, Mr. Banner held
senior-level executive and editorial positions at ABC News. Previously, he held a number of senior editorial
positions at ABC News, including Senior Broadcast Producer of 'ABC's World News Tonight with Peter Jennings'. From 1999 to 2000, Mr. Banner was Senior Producer of 'Good Morning America' news segments.
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Mr. Narasimhan has been the Chief Executive Officer of Latin America Foods business at Pepsi since
September 2014. Previously, he served as a Senior Vice President and the Chief Financial Officer at PAF. Prior
to PepsiCo, Mr. Narasimhan was a Director and Location Manager at McKinsey's New Delhi Office. He worked
with McKinsey for 19 years around the world. Mr. Narasimhan had responsibility for consumer-facing industries
in India, co-led the Global Consumer and Shopper Insights Practice and led McKinsey's research and on the
emerging market consumer. Previously, he co-led the Global Retail Knowledge Council of McKinsey's Retail
Practice. Prior to joining McKinsey, Mr. Narasimhan spent three years as a Line Business Manager in a
manufacturing startup in India. He is currently a member of the Council on Foreign Relations, a Fellow of the
Foreign Policy Association, Co-Chairman of the Advisory Board at the G20Y Conference and is an Advisory Board member of the Jay H. Baker Retailing Center at the Wharton School, University of Pennsylvania.
Board: Senior Management
Job Title: Chief Executive Officer, PepsiCo Latin America Foods
Since: 2014
Mehmood Khan
Dr. Khan has been the Executive Vice President and Chief Scientific Officer, Global R&D at Pepsi since 2012.
He previously served as the Chief Executive Officer of Pepsi's Global Nutrition Group from 2010 and as the
Chief Scientific Officer from 2008. Prior to joining the company, Dr. Khan served for five years at Takeda
Pharmaceuticals in various leadership roles including President of R&D and Chief Medical Officer. He also
served at the Mayo Clinic until 2003 as the Director of the Diabetes, Endocrinology and Nutrition Clinical Unit and as a Consultant Physician in Endocrinology.
Board: Senior Management
Job Title: Executive Vice President and Chief Scientific Officer, Global R&D
Salary (US$): 7,120,831
Since: 2012
Age: 55
Sanjeev Chadha
Mr. Chadha has been the Chief Executive Officer of PepsiCo AMEA, a business division of Pepsi, since 2013.
Prior to this role, he was the President of PepsiCo's Middle East and Africa region. Previously, Mr. Chadha
served as the President, PepsiCo India and South Asia; Senior Vice President, Commercial, Asia Pacific,
including China and India; and Senior General Manager, Vietnam and the Philippines, as well as served in other
leadership roles in sales, marketing, innovation and franchise. He joined the company 1989 as a Founding Member of the PepsiCo beverage business in India.
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Mr. Abdalla has been the President at Pepsi since 2012. Prior to his current role, he served as the Chief
Executive Officer, European operations at Pepsi from 2009 to 2012. Mr. Abdalla joined Pepsi in 1995 and has
held a variety of senior positions, including General Manager of Pepsi's European Beverage Business, General
Manager of Tropicana Europe and Franchise Vice President for Pakistan and the Gulf region. Prior to joining Pepsi, he worked for Mars Incorporated.
Board: Senior Management
Job Title: President
Salary (US$): 10,960,181
Since: 2012
Age: 55
Alberto Ibarguen
Mr. Ibarguen has been an Independent Director at Pepsi since 2005. He has been the President and Chief
Executive Officer at the John S. and James L. Knight Foundation since 2005. Mr. Ibarguen previously served as
the Chairman at Miami Herald Publishing Co., and as a Publisher of The Miami Herald and El Nuevo Herald. He is a member of the Board at American Airlines Group (formerly AMR Corporation) and AOL.
Board: Non Executive Board
Job Title: Independent Director
Salary (US$): 200,000
Since: 2005
Age: 70
Alberto Weisser
Mr. Weisser has been an Independent Director at Pepsi since 2011. He served as the Chairman, Chief
Executive Officer and Executive Chairman at Bunge, a global food, commodity and agri-business company, from
1999 until 2013 and its Chief Financial Officer from 1993 to 1999. Mr. Weisser is a board member at the Council of the Americas and served as a Director at International Paper Company from 2006 until 2012.
Board: Non Executive Board
Job Title: Independent Director
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Dr. Vasella has been an Independent Director at Pepsi since 2002. He served as the Chairman of the Board at
Novartis from 1999 to 2013. Dr. Vasella also served as the Chief Executive Officer at Novartis from 1996 to
2010. During 1992-96, he held the positions of Chief Executive Officer, Chief Operating Officer, Senior Vice
President and Head of Worldwide Development and Head of Corporate Marketing at Sandoz Pharma. Dr.
Vasella also served at Sandoz Pharmaceuticals Corporation from 1988 to 1992. Dr. Vasella is also a Director at American Express Company.
Board: Non Executive Board
Job Title: Independent Director
Salary (US$): 216,025
Since: 2002
Age: 60
David C. Page
Dr. Page has been an Independent Director at Pepsi since 2014. He has been a Director at the Whitehead
Institute at Biomedical Research since 2005. Dr. Page has also been a Professor of Biology at MIT since 1997
and an Investigator at the Howard Hughes Medical Institute since 2000. Currently, he is a member of the National Academy of Sciences, the American Academy of Arts and Sciences and the Institute of Medicine.
Board: Non Executive Board
Job Title: Independent Director
Since: 2014
Dina Dublon
Ms. Dublon has been an Independent Director at Pepsi since 2005. Previously, she served as an Executive Vice
President and the Chief Financial Officer at JP Morgan Chase & Co. from 1998 until her retirement in 2004. Ms.
Dublon is also a Director at Microsoft Corp. and Accenture and serves on the Supervisory Board at Deutsche Bank. She is also a Trustee at Carnegie Mellon University.
Board: Non Executive Board
Job Title: Independent Director
Salary (US$): 220,000
Since: 2005
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Sir George has been an Independent Director at Pepsi since 2012. He has been the Chairman at Smiths Group
since 2013. Sir George has also been the Chairman of the Board at Arle Capital, a private equity firm, since
2012. From 2005 to 2012, he served as the Chairman, President and Chief Executive Officer at 3M Company.
Earlier, between 1997 and 2005, Sir George was the Chairman and Chief Executive Officer at Brunswick
Corporation, a boat and recreational product manufacturer. At present, he serves on the Board at Stanley Black & Decker, Archer-Daniels Midland Company and Hitachi.
Board: Non Executive Board
Job Title: Independent Director
Salary (US$): 200,000
Since: 2012
Age: 67
Ian M. Cook
Mr. Cook has been an Independent Director at Pepsi since 2008. He was appointed the Chief Executive Officer
and was elected to the Board of Colgate-Palmolive Company in 2007 and became Chairman of its Board in
2009. Mr. Cook joined Colgate-Palmolive Company in the UK in 1976 and progressed through a series of senior
management roles around the world. In 2002, he became the Executive Vice President, North America and
Europe. In 2004, Mr. Cook became the Chief Operating Officer with responsibility for operations in North
America, Europe, Central Europe, Asia and Africa. In 2005, he became responsible for all Colgate-Palmolive Company operations worldwide.
Board: Non Executive Board
Job Title: Independent Director
Salary (US$): 219,167
Since: 2008
Age: 61
Lloyd G. Trotter
Mr. Trotter has been an Independent Director at Pepsi since 2008. He has also been a Managing Partner at
GenNx360 Capital Partners since 2008. Mr. Trotter served as the Vice Chairman at General Electric and as the
President and Chief Executive Officer at GE Industrial from 2006 to 2008. Between 1989 and 2006, he held
various positions at GE, including Executive Vice President, Operations from 2005 to 2006. Mr. Trotter also
served as the President and Chief Executive Officer at GE Consumer and Industrial Systems from 1998 to 2005.
He was also the President and Chief Executive Officer, Electrical Distribution and Control during 1992-98. Currently, Mr. Trotter is also a Director at Textron and Daimler.
Board: Non Executive Board
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Mr. Hunt has been an Independent Director at Pepsi since 1996. He has been the Chairman, Chief Executive
Officer and President at Hunt Consolidated, a holding company for oil production and exploration and real estate
investment management businesses, since 1976. Mr. Hunt began his association with Hunt Oil Company in
1958. He is also a Director of numerous corporate organizations, including Bessemer Securities Corporation,
Bessemer Securities and King Ranch, as well as a Trustee of numerous charitable organizations, including The Cooper Institute and Southern Methodist University.
Board: Non Executive Board
Job Title: Independent Director
Salary (US$): 215,000
Since: 1996
Age: 70
Rona A. Fairhead
Ms. Fairhead has been an Independent Director at Pepsi since March 2014. She served as the Chairman and
Chief Executive officer at the Financial Times Group, a division of Pearson, from 2006 to 2013. Ms. Fairhead
previously served as Pearson's Chief Financial Officer from 2002 to 2006. Prior to joining Pearson, she held
several leadership positions at Bombardier, in the Aerospace division, and at Imperial Chemical Industries, a
specialty chemicals company, where she ultimately served as Executive Vice President of strategy and group financial control.
Board: Non Executive Board
Job Title: Independent Director
Since: 2014
Age: 52
Sharon Percy Rockefeller
Ms. Rockefeller has been an Independent Director at Pepsi since 1986. She has been the President and Chief
Executive Officer at WETA public radio and television stations in Washington since 1989. Ms. Rockefeller was a
member of the Board of Directors at WETA from 1985 to 1989. Formerly, she served as a Director at the Public
Broadcasting Service (PBS) in Washington. Ms. Rockefeller currently serves as a Trustee at Museum of Modern
Art, Johns Hopkins Medicine and Sibley Memorial Hospital. She also serves as the President at the International
Council of The Museum of Modern Art, and as the Chairman of the Board of Trustees at the National Gallery of
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Pepsi-Cola was created in the late 1890s by Caleb Bradham, an American pharmacist. Many years later, Frito-
Lay, Inc. was formed by the 1961 merger of the Frito Company (founded by Elmer Doolin in 1932) and the H. W. Lay Company (founded by Herman W. Lay in 1932).
In 1965, the present company of PepsiCo, Inc. was founded by Donald M. Kendall, the then President and Chief
Executive Officer of Pepsi-Cola, and Herman W. Lay, the then Chairman and Chief Executive Officer of Frito-Lay, through the merger of the two companies.
By 1966, Pepsi entered the Japanese and Eastern Europe markets. In 1969, the company introduced a new
color theme and changed its packaging using red, white and blue colors to reflect the new theme. During the same year, Frito-Lay introduced Funyuns brand onion flavored snacks.
By 1970, the company's sales crossed the $1 billion mark. In the same year, the company's headquarters was
moved from New York City to the current world headquarters in Purchase, New York in the US. During the year,
Frito-Lay introduced W.C. Fritos as its new advertising mascot marking the expansion of this brand. Over the
following decade, Frito Lay's opened, on an average, more than one new plant a year. The year 1970 also
marked some of the company's innovations in packaging such as the introduction of the industry's first two-liter bottle and the introduction of lightweight, recyclable, plastic bottles in response to consumer preferences.
Later in 1972, the company officially became the first foreign product sold in the then Union of Soviet Socialist
Republics. During the same year, Pepsi was given exclusive rights to import Stolichnaya Russian vodka into the
US. In the following year, Foods International, later called PepsiCo Foods International and subsequently named Frito-Lay International, was established to market snack foods around the world.
By 1974, the company's revenues surpassed the $2 billion mark and it became the first American consumer
product to be produced, marketed and sold in the former Soviet Union. In 1975, the company launched Pepsi Light, with a distinctive lemon taste, an alternative to traditional diet colas.
In 1977, Pepsi acquired Pizza Hut, an American restaurant chain, and in the same year, the company surpassed
the $3 billion mark revenues. The next year, in 1978, Pepsi acquired Taco Bell, an American chain of fast-food
restaurants. In 1979, the company established its first R&D center in Valhalla, New York. The company introduced 12-pack cans for the first time in the same year and also reached the $5 billion mark in sales.
In 1980, the company established PepsiCo Food Service International, its food service division, to focus on
overseas development of restaurants. In the same year, Frito-Lay launched the new Grandma's brand cookies
across the US. Pepsi's expanding business helped it gain the number one place in sales in take-home market in
the US in 1980. In 1981, Frito-Lay launched the Tostitos brand crispy round tortilla chips and also started
nutritional labeling on all its products sold in the US. In the same year, the company launched PepsiCo Food
Systems, its restaurant supply company, and entered into an agreement with China to manufacture soft drinks.
The following year (1982), Pepsi inaugurated the first Pepsi-Cola operation in China and also launched Pepsi
Free and Diet Pepsi Free, world's first major brand caffeine-free colas. In 1983, the Bottler Hall of Fame was established to recognize the achievement and dedication of international bottlers.
In 1984, the company underwent a major restructuring program to organize its business into three focus areas:
soft drinks, snack foods and restaurants. The company's transportation and sporting goods businesses were
sold in the same year. During the year, Pepsi launched a reformulated version of Diet Pepsi with 100%
NutraSweet. During the same time, Slice and Diet Slice, the first major soft drinks with fruit juice, were also
introduced. In the same year, the company achieved a new breakthrough in advertising through the concept of music marketing by signing up with Michael Jackson and his brothers to do a TV commercial for the company.
By 1985, the company expanded into 150 countries and territories around the world, while its snack food
operations were being marketed in 10 international markets. Frito-Lay also expanded into a new headquarters in
Texas. In the same year, Pepsi's first line of sweet snacks, Sonrics, was launched in Mexico, while the
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
company's Chinese operations started distribution activities.
In 1986, the company underwent a second major reorganization to decentralize its various business operations.
Under the new structure, beverage operations were combined under PepsiCo Worldwide Beverages while the
snack food operations were combined under PepsiCo Worldwide Foods. Further, the company was
reincorporated in North Carolina, the US. In the same year, Pepsi added Kentucky Fried Chicken (KFC), a quick
service restaurant, to its food service portfolio. Apart from KFC, the company also purchased 7Up International,
the third largest franchise soft drink operation outside of the US, and Mug Root Beer, a branded root beer
company. In the same year, the company got listed on the Tokyo Stock Exchange while its second bottling plant
in China was launched. The year also marked the launch of Santitas brand restaurant style tortilla chips by Frito-Lay. In 1987, Frito-Lay pioneered the use of hand-held computers for marketing.
In 1988, Pepsi-Cola International entered into a landmark joint venture agreement in India, while renewing its
trade accord with the Soviet Union. During the same year, worldwide retail sales of Doritos brand tortilla chips
reached the $1 billion mark and Doritos officially became the world's largest selling snack chips brand. In 1989,
Pepsi acquired Walkers Crisps and Smith Crisps, two of the UK's leading snack food companies, and
Smartfood, a ready-to-eat popcorn business. In 1990, Pepsi acquired a controlling interest in Gamesa, Mexico's
largest cookie company. The company also signed one of the largest commercial trade agreements in history with the Soviet Union.
Pepsi acquired an equity interest in Wedel SA, a manufacturer of chocolate and confectionery in Poland, in
1991. The company also formed a joint venture with Thomas J. Lipton Co. to develop and market tea-based
drinks. Also in 1991, Pepsi purchased an equity position in Carts of Colorado, a manufacturer and marketer of
mobile merchandising equipment. The year also marked several new product launches by Frito-Lay, including
Sunchips, its first multigrain snack; Cheetos Paws and Tostitos brand restaurant-style tortilla chips. In the same year, Pepsi introduced a new logo, its eighth in 93 years.
In 1992, Pepsi purchased an equity interest in California Pizza Kitchen, while Frito-Lay and General Mills signed
an agreement to merge snack food businesses in Europe. The company began distribution of Lipton's line of
ready-to-drink teas in the US in the same year, while Frito-Lay launched the reformulated variants of Doritos
brand Nacho Cheesier flavored tortilla chips. Frito-Lay's new launches continued into the following year (1993)
with the introduction of new Doritos brand Tortilla Thins, Baked Tostitos brand Tortilla Chips and Wavy Lay's
Original and Au Gratin flavors. In the same year, Pepsi introduced The Cube, an innovative 24-can multi-pack
that satisfied growing consumer demand for convenient large size soft drink packaging; and Pepsi Max, a new
variant of soft drink that delivered maximum cola taste in a no-sugar product. Pepsi also introduced the Aquafina
bottled water into test market. The year also marked several acquisitions by Pepsi, including East Side Mario's Restaurants and D'Angelo Sandwich Shops chain.
In 1994, the company became the first major soft drink maker to begin producing and distributing its product in
Vietnam. The company's arm, Pepsi-Cola International, acquired an Indian company, its first big bottling plant in
Bombay, India. During the same year, the company further expanded its operations by forming the North
American Coffee Partnership with Starbucks to jointly develop ready-to-drink coffee beverages. Along with
business expansions, the year also saw several new launches, including All Sport, a new sports drink; Lay's
Masterpiece brand Barbecue Flavor Potato Chips by Frito-Lay and K.C. Masterpiece Original Brand Barbecue
Sauce; new baked Rold Gold Fat Free Thins Pretzels, the first fat free reduced sodium pretzel by Frito-Lay;
Cheese-less Cheetos (launched in China) and Doritos (launched in the UK). Furthermore, Pepsi entered into a
licensing agreement with The Procter & Gamble Co. to launch a line of fountain juices and drinks under the Citrus Hill trademark.
The year 1995 was marked with several landmark launches by the company. By this year, the Lay's brand
potato chips were expanded to 20 markets throughout the world, while the snack business aggressively
expanded its low/no-fat snack segment with the launch of new Baked Lays. Frito-Lay also test-marketed Baked
Tostitos, Rold Gold Fat Free Pretzels, Ruffles Reduced Fat Potato Chips and Tostitos Fat-Free Salsas and
Black Bean Dip brands during the year. In the meanwhile, the company's beverage business saw two new
launches: the introduction of Smooth Moos Smoothies, a line of low-fat dairy shakes; and 7Up International launching 7UP Ice Cola, a new clear cola. The year 1995 saw the launch of the company's official website.
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
In 1996, the company underwent another business reorganization exercise with Pepsi-Cola domestic and
international operations being combined into Pepsi-Cola Company, while the international and domestic snack
food operations were combined into one business unit called Frito-Lay Company. At the same time, the
company announced its plans to spin off its restaurant businesses as an independent publicly-traded company,
and sell its food distribution company to focus on its core beverage and snack food businesses. In line with its
focus on core business areas, the company entered into a partnership with MTV to develop international
programming, cross promotions, marketing tie-ins and special events. The company also entered into a
promotional alliance with Lucasfilm linking existing and future Star Wars series with Pepsi beverage, snack
foods and restaurant brands worldwide. In the same year, the company launched Smooth Moos Smoothies, a line of low-fat dairy shakes.
In 1997, the company's centenary year of operation, Pepsi-Cola North American bottling operations became a
separate unit called The Pepsi-Cola Bottling Co. and the company rolled out the Aquafina brand of bottled water
in the US. In the same year, Frito-Lay announced plans to buy the 104-year-old snack, Cracker Jack, a candy-
coated mix of popcorn and peanuts, from Borden Foods Corp. Within its snack portfolio, Frito-Lay also launched Doritos 3D's Tortilla Chips, a triangle-shaped chip.
The year 1998 saw some of the breakthrough innovations happening for the company's beverage business with
the launch of products like Pepsi One, the first ever one-calorie cola made available in the US with a Food and
Drug Administration-approved sweetener Sunett. The company also introduced two-liter plastic bottle with built-
in grip handle to make it easier to grip and pour. In the same year, the company also made one of its largest
acquisitions, Tropicana Products, from Seagram Company. Following this, Tropicana Products acquired
Alimentos del Valle, one of Spain's leading chilled juice and soup companies, further expanding Pepsi's portfolio.
The snack food business also made some acquisitions during the year including the purchases of Smith's
Snackfood Company in Australia from United Biscuits Holdings; Barcel, Chile's second-largest snack company;
and Tasty Foods Egypt. Following these acquisitions, Frito-Lay also became the snack chip leader in South and Central America as it entered into a joint venture with Empreseas Polar SA of Venezuela.
In the year 1999, Pepsi started trading on the New York Stock Exchange under the symbol PBG, following a
$2.3 billion public offering. Pepsi and Suntory Limited signed an agreement to create a joint venture linking
bottling networks in North Carolina and New York, the US to create a new company, Pepsi Bottling Ventures,
which became the third largest bottler in the Pepsi system. Another breakthrough in the company's history was
Tropicana juices entering the huge Indian market for the first time in that year. In the same year, Tropicana
launched two new calcium-fortified Pure Premium juices, Pure Premium Grovestand Calcium and Pure Premium
Ruby Red Grapefruit Calcium, while Lipton launched Iced Tea Green Tea with Honey and Diet Peach.
Furthermore, Frito-Lay signed an agreement with Oberto Sausage to be the exclusive distributor of the natural-style jerky.
The company's acquisition spree continued in the year 2000 with the buying of a majority stake in South Beach
Beverage Company, whose highly innovative SoBe brand made it one of industry's most successful companies.
The company also reached an agreement with The Quaker Oats Company to merge its operations. The
company teamed up with Yahoo, the biggest web navigation company, in a multimedia marketing campaign
aimed at teens and young adults. Other remarkable events in the year included the launch of an icy smoothie
soy milk-and-fruit drink by Tropicana, in a joint venture with Galaxy Foods Co.; Sierra Mist, a caffeine-free,
lemon/lime soda by Pepsi; and a caramel-flavored bottled Frappuccino coffee drink by The North American Coffee Partnership.
In 2001, Pepsi acquired Tasali Foods, a Saudi Arabian snack company. Newly launched products during the
year included Tropicana Smoothies, Mountain Dew Code Red, Lay's Bistro Gourmet potato chips, Pepsi Twist -
regular and diet versions of the crisp new cola with lemon, SLAM - the orange brand Mirinda (in Italy), and Diet Sierra Mist.
In 2002, Pepsi reorganized again to unite all North American beverage operations, including Pepsi-Cola,
Tropicana and Gatorade, into one new division, PepsiCo Beverages and Foods North America. New product
launches during the year included Go Snacks by Frito-Lay, Gatorade ICE in three new fruity flavors, Tropicana
Pure Premium single-serve resalable bottle for on-the-go consumers, Mr. Green - a green-tinted carbonated soft
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drink with caffeine and ginseng under SoBe's New Age beverage line, and a new line of Gatorade brand drinks
called Xtremo. During the year, the company shifted its focus to healthy snacking and beverage options with the
introduction of several new products under the healthy-theme. For the first time, Pepsi published its Health and
Wellness Philosophy and announced its plans to eliminate trans-fats from Doritos, Tostitos, and Cheetos and
also launched Lay's Reduced Fat chips and Cheetos Reduced Fat snacks. Aquafina Essentials target active,
targeted at health-conscious adults in four lightly sweetened varieties, including B-Power, Calcium+, Daily C and
Multi-V, was launched on the same lines. At the same time, Quaker's Nutrition for Women team developed a
Food Guide Pyramid for Women as well as an online nutritional assessment. Tropicana Pure Premium and
Quaker Oatmeal together launched the Heart and Soul Mates Support Network featuring nutrition tips,
motivational messages and coaching advice, to help consumers turn healthy habits into life-long changes. The
company also introduced Marathon Kids, a program that encouraged kids and their families to be more physically active.
In 2003, the company signed several sporting sponsorship deals like US Open Snowboarding Championships, a
four-year sponsorship deal with the Canadian Hockey Association, and a four-year sponsorship agreement with
the UK Football Association. In another round of reorganization, the company created PepsiCo International that
consolidated all international snack, beverage and food units in an effort to drive faster growth and improved
profitability around the world. New product launches during the year included Quaker Chewy Wholesome
Favorites and Quaker Chewy Trail Mix, Mt. Dew LiveWire, a new line of snacks made with organic ingredients called Natural Snacks, new Oatmeal Breakfast Squares, Pepsi Vanilla and Tropicana 100% Juice Blends.
In 2004, Pepsi Bottling Group (PBG) bought Phil Gaudreault et Fils Ltee, a Quebec-based Pepsi bottler. During
the year, the company launched several new products under various brands including Doritos and Cheetos
Halloween Treat Multi-Sacks, Doritos Black Pepper Jack, Sugar-Free No Fear by SoBe, Doritos Edge and
Tostitos Edge - line extensions with 60% fewer carbohydrates, Quaker Chewy Cookies and Milk granola bars
and Quaker Fruit and Oatmeal cereal bars, Pepsi Edge - the first full-flavored cola with 50% less sugar,
carbohydrates and calories than regular cola, and Gatorade Endurance Hydration Formula - a specialized sports
drink to meet the needs of endurance athletes. The company continued launching many new products in 2005
like Tropicana Twister Soda, Pepsi Lime and Diet Pepsi Lime, Dole line of 100% and 50% juices, reformulated
Pepsi ONE with Splenda brand sweetener, Wasabi Funyuns under the Frito-Lay portfolio, Tropicana Sensations,
Quaker's Weight Control Instant Oatmeal, Quaker Milk Chillers, MDX Energy Soda, Twistos Croutons for the
Russian market, Gatorade Propel Calcium (the first Calcium-enriched fitness water), and Pepsi Max Cino by
Britvic. In the same year, Pepsi was chosen as the exclusive beverage provider for Soup Kitchen International
and The Original SoupMan. The company also partnered with Harvey's, Swiss Chalet and Milestone's Restaurants during the year.
In 2006, Pepsi completed the acquisition of Stacy's Pita Chip Company and IZZE Beverage Company. During
the same year, the company also acquired Naked Juice Company and the New Zealand snack company
Bluebird Foods. In line with its health-focus, Frito-Lay launched reformulated variants of Lay's Ruffles by cutting
more than 50% saturated fats by using NuSun Sunflower Oil. In the same year, Diet Pepsi also launched Jazz, a
new line of zero-calorie colas made available in Black Cherry French Vanilla and Strawberries and Cream flavors.
In 2007, the company made one of the largest corporate purchases of Renewable Energy Certificates and joined
the US Climate Action Partnership as part of its commitment to sustainability. In the same year, Aquafina
launched Aquafina Alive, a low calorie, vitamin-enhanced water beverage while Tropicana launched Tropicana
Fruit Squeeze, a 20-calorie drink with real Tropicana fruit juice. Other health-focused launches in the year
included IZZE Esque, a low-calorie, nothing artificial beverage; Quaker Mini Delights offering great taste and
portion control; and Diet Pepsi Jazz in caramel flavor. In the same year, Pepsi and Pepsi Americas jointly acquired Sandora, a juice company in Ukraine.
In 2008, Pepsi completed the acquisition of Spitz International, a Canadian maker of sunflower and pumpkin
seeds, while PAF announced plans to invest $3 million in Mexico to expand Sabritas and Gamesa brands in the
region. In the same year, the company announced its plans to invest $1 billion in China as part of its strategy to
expand in emerging markets and broaden the portfolio of locally-relevant products. The company also made
public its plans to buy Bulgaria's leading nuts and seeds company and the Russian juice leader, Lebedyansky. In
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the same year, the company acquired the UK based vitamin water brand, V Water.
In 2009, Pepsi joined Ceres, a coalition of investors, environmental groups and public interest organizations
working to address sustainability efforts. The company's joint venture with Almarai acquired a stake in Jordanian
dairy company, Teeba. Pepsi created a new business unit named Baked Snacks North America to meet
consumers' interest in more nutritious snacks and foods. In the same year, Pepsi opened a new Russian
beverage plant in Domodedovo, the largest bottling plant in Pepsi's global system. The company also signed
merger agreements with PBG and PepsiAmericas (PAS). Pepsi also announced the acquisition of Amacoco,
Brazil's largest coconut water company. As part of its business restructuring plans, the company also announced
its plans of forming a new bottling unit. The company also entered into a strategic alliance with Calbee Foods
Company to make and sell a wide range of food products in Japan. In the same year, FLNA announced a
partnership with Terra Cycle, a company that would repurpose Frito-Lay snack packaging into merchandise.
FLNA and Oberto Sausage Co. reached an agreement to end partnership for distribution and sales of OhBoy!
Oberto brand meat snack products in the US and Canada. The company acquired Karinto snack business in
Peru in the same year and also announced its plans to acquire PBG and PAS, its two largest anchor bottlers. It
was in the same year that Pepsi launched its first climate-friendly vending machines in the US. In West China,
PepsiCo Greater China opened a new bottling plant, Chengdu Pepsi Beverage Co. The company also announced a multi-year distribution agreement with Rockstar Energy Drink in 2009.
In 2010, Pepsi completed the strategic acquisitions of its two largest bottlers, PBG and PAS. Around the same
time of the year, Pepsi Beverages Company (PBC), a division of Pepsi, and Tampico Beverages announced an
agreement to distribute TAMPICO PLUS fruit-flavored beverage products through Pepsi's direct store delivery
system in select US markets. In the same year, PBC completed the acquisition of Pepsi-Cola Bottling Co of Yuba City.
During mid-2010, PepsiCo Beverages Americas signed an agreement with The FRS Company for distribution of
its FRS Healthy Energy brand of products. In the same year, the company announced an investment of $3
million over the next three years to create the Agricultural Development Center of Peru. The Center will focus on
the development of new varieties of potatoes and other tubers and roots. Around the same time, the company
announced its plans to invest $250 million in Vietnam over the next three years. Pepsi also collaborated with Senomyx for a four-year agreement related to Senomyx's sweet-taste technology in the same year.
The company also announced its plans to invest $140 million to build its 10th plant in Russia, towards the end of
2010. Furthermore, the company announced plans to roll-out its new i-crop farming technology globally. I-crop, a
web-based tool developed by Pepsi in conjunction with Cambridge University, is a crop management system
that enables farmers to monitor, manage and reduce their water use and carbon emissions, while also
maximizing potential yield and quality. The company also signed an agreement with the VSIP Bac Ninh, to
confirm its development of a beverage production plant in the VSIP Bac Ninh Integrated Township and Industrial Park.
Pepsi and GNC, a specialty retailer of nutritional products for the active consumer, announced a joint venture
agreement towards the end of 2010 to develop and sell fortified coconut water products under the newly created
Phenom brand name. The company also announced its plans to acquire Wimm-Bill-Dann Foods (WBD), a
Russian branded food-and-beverage company, around the same time. In the same year, the company increased
its investment in O.N.E., a Los Angeles based coconut water company, thereby acquiring a majority stake in the
company. Furthermore, Pepsi announced that approximately 50% of Pepsi's FLNA's product portfolio will be
made with all natural ingredients, including three of its biggest brands, Lay's potato chips, Tostitos tortilla chips
and SunChips multigrain snacks. The products made with all natural ingredients will not have any artificial or
synthetic ingredients, artificial flavors or artificial preservatives, or ingredients such as monosodium glutamate. The acquisition of WBD was completed by the end of 2010.
In 2011, Pepsi and Strauss Group announced a joint venture partnership to produce and sell fresh dips and
spreads in key markets outside of North America. The two companies earlier operated a North American joint
venture since 2007 under the Sabra brand. In the same year, Burger King Corporation signed a multi-year
agreement with Pepsi. As per the agreement, Pepsi became the exclusive soft drink supplier in more than 1,000
Burger King Corporation restaurants throughout the Latin America and Caribbean region. Also in the same year,
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Lipton Iced Tea launched a 100% Natural Lipton Iced Tea, a new line of beverages with all-natural ingredient list.
The company launched five varieties of eco-friendly, recyclable and compostable cups to foodservice customers
in the US in 2011. During the same time, Tropicana Trop50 introduced Lemonade and Raspberry Lemonade, two new low-guilt lemonade flavors that contain 50% less sugar and calories, and no artificial sweeteners.
PepsiCo Beverages Canada strengthened its commitment towards sustainable business practices with the
introduction of 7UP EcoGreen bottle, Canada's and North America's first soft drink bottle made from 100%
recycled polyethylene terephthalate plastic, in 2011. The company also signed a partnership with Grupo
Embotelladoras Unidas, S.A.B. de C.V., a Pepsi bottler in Mexico, and Empresas Polar, a Venezuela-based food and beverage manufacturer, to form a new joint venture, creating a nationwide beverage company in Mexico.
Further in 2011, the company added Doritos and Cheetos Fiery Fusion snacks to its portfolio of spicy snacks. In
the same year, Pepsi created the Global Snacks Group, a new business initiative to drive innovation across its
portfolio of global snack food brands. Also in 2011, the company entered into a strategic alliance with Tingyi
(Cayman Islands) Holding Corp. (Tingyi Holding), one of the major food and beverage companies in China.
Through this alliance, Tingyi Holding's beverage subsidiary, Tingyi-Asahi Beverages Holding Co Ltd, will become
Pepsi's franchise bottler in China. Around the same time, the company announced the acquisition of Mabel, a
producer of cookies, crackers and snacks in Brazil. The acquisition added Mabel's well-known brands such as
Mabel, Elbi's, Kelly and Skiny to Pepsi's existing food and beverage portfolio and created new opportunities for
future growth and expansion. The company also entered into a multi-year partnership with Jersey Mike's Subs,
an American sub sandwich chain, to sell several of Pepsi's beverage and snack brands in 500 locations across 30 states in the US.
In 2012, Pepsi formed a strategic alliance with Ocean Spray Cranberries, a US-based, grower-owned
cooperative that produces cranberry and grapefruit juice drinks in Latin America. As part of the alliance, Pepsi
will gain exclusive rights to manufacture and distribute a portfolio of cranberry and blueberry-based beverages
through its Latin America Beverages division. The companies will also share marketing responsibilities for the
products and intend to collaborate on product innovation. Further in 2012, the company announced that three
more iconic brands, Diet Mountain Dew, Brisk and Starbucks ready-to-drink beverages, were added to its
portfolio of billion-dollar brands. In FY2011, these brands generated more than $1 billion in annual retail sales, expanding Pepsi's portfolio of billion-dollar brands to 22.
The company announced a new global structure and strengthened management team in 2012, in line with its
strategy to become a fully integrated, global food and beverage company. As per the new structure, Pepsi's
global groups will work across the regions to fully leverage the power and scale of the company. In accordance with this development, Pepsi also announced some leadership changes.
Also in 2012, Pepsi and its joint venture partner, Strauss Group, introduced Obela, a fresh, refrigerated dips and
spreads brand, for the Mexican market. The joint venture will launch several varieties of hummus under the new
brand to meet the growing consumer demand for health and wellness options. In the same year, Pepsi signed a
multi-year relationship with the Pittsburgh Steelers to be the franchise's exclusive non-alcoholic beverage, salty
snacks and sports fuel provider. The deal marks the Steelers' first partnership with Pepsi's expanded portfolio,
which includes brands such as Pepsi, Frito-Lay and Gatorade. Further in the same year, Pepsi opened a new
food manufacturing facility in Wuhan, China. The plant, which is PepsiCo's sixth food manufacturing site in the
country, is part of the company's plans to drive the continued growth of its China business and expand further into central and western China.
Pepsi entered into a strategic alliance with Suntory Holdings, a global beverage and wellness company based in
Japan, in 2012 to form a joint venture in Vietnam. Under the terms of the agreement, Suntory Holdings will
acquire a 51% stake in Pepsi's Vietnam beverage business, while Pepsi will be a 49% shareholder. The new
joint venture will serve as the bottler for both companies in Vietnam. Around the same time, the company
opened a new beverage manufacturing plant in Zhengzhou, China. The new plant was built in collaboration with
Tingyi Holding, one of the leading food and beverage companies in China. The new Zhengzhou PepsiCo
Beverages facility is the first plant opened since the two companies formed their strategic alliance earlier in the
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year. Later in 2012, Pepsi opened a new food and beverage innovation center in Shanghai, China. The new
facility is the company's largest R&D center outside of North America, and will serve as a hub of new product, packaging and equipment innovation for Pepsi's businesses throughout Asia.
Towards the end of 2012, Rice-A-Roni launched new single-serve, microwavable, flavored rice cups for people
on-the-go. The company also announced plans to expand its Quaker brand in India to include ready-to-cook
upma and poha mixes. During the same time, Pepsi forayed into the fruit-and-vegetable category, with the
launch of Tropicana Farmstand. The company announced plans to roll out its flagship juice brand Tropicana in a powder format in India. This marks Pepsi's entry into the Indian powder concentrate category.
The company launched Trop50, a new range of drinks with half the calories and sugar of conventional juice, in
the UK in January 2013. In the same month, Pepsi India consolidated all of its company-owned bottling plants
under two market units to improve operating efficiencies. Further in January 2013, the company partnered with
Burger King Corporation to be the exclusive supplier of soft drinks in over 100 Burger King Corporation restaurants throughout China.
In March 2013, Pepsi and two of its independent bottlers, Pepsi Bottling Ventures (PBV) and Honickman Group's
Pepsi-Cola Bottling Company of New York (PCNY), announced their intention to transfer certain franchise
ownerships in New York, North Carolina, Idaho and Vermont. Pepsi agreed to swap five counties of its
company-owned North Carolina territory, including Charlotte, to PBV in exchange for PBV's 11 counties in
Vermont and 18 counties in Idaho. In exchange, PBV agreed to sell its Long Island, New York territory, including
Nassau and Suffolk counties, to the Honickman Group's PCNY, which already operates in each of New York
City's five areas (Manhattan, the Bronx, Brooklyn, Queens and Staten Island) and New York's Westchester
County. These moves are expected to drive operating efficiencies and improve customer service. In the same
month, the company launched a new single-serve bottle for its Pepsi trademark portfolio, including Pepsi, Diet Pepsi, Pepsi Max and Pepsi Next, marking its first design update since 1996.
Muller Quaker Dairy, a joint venture between Pepsi and Theo Muller Group, opened a new yogurt manufacturing
facility in Batavia, New York, in June 2013. The new facility will serve as a national production and distribution
center for Muller yogurt. In the same month, Pepsi's FLNA segment opened a compressed natural gas (CNG)
fueling station in Beloit, Wisconsin. FLNA is investing in natural gas infrastructure for large commercial vehicles as part of its commitment to alternative fuel.
In July 2013, Ruffles brand introduced Crispy Fries Potato Strips in the US, the French fry-shaped snacks sliced
from real potatoes. During the same month, Manchester United Football Club and Pepsi announced a multi-year
regional sponsorship agreement in Asia Pacific. Under terms of the agreement, Pepsi will become the official
soft drinks partner of Manchester United Football Club in Thailand, Malaysia, Singapore, Myanmar, Cambodia,
Laos and Brunei. The company will also hold exclusive rights to use Manchester United branding on its products and point of sale materials within these markets.
Aquafina FlavorSplash, a product of PAB, launched a new line of sparkling water beverages and liquid water
enhancers, offering a portfolio of zero calorie hydration options to teen consumers, in October 2013. Stacy's
Snacks, a brand of FNLA, introduced Stacy's Bake Shop Bakery Crisps, a sweet and savory line-up of artisan
bakery bread snacks. These crisps are made from real bakery breads and include herbed baguette, pretzel bread and banana nut, and vanilla pound cake.
In November 2013, Pepsi announced plans to invest approximately $5.5 billion in India by 2020. The investment
is expected to further strengthen and expand the capabilities of Pepsi and its partners in the following strategic
areas: innovation, manufacturing, infrastructure and agriculture. The Quaker Oats Company, a subsidiary of
Pepsi, introduced a range of innovative products in December 2013. These new oat-based innovations include Quaker Warm & Crunchy Granola, Quaker Instant Oatmeal Cups and Quaker Real Medleys Cereal.
In January 2014, Pepsi announced plans to invest $5 billion in Mexico over the next five years. The investment
is designed to further strengthen Pepsi's food and beverage business in Mexico.
Pepsi and LOTTE-MGS Beverage (Myanmar) Co., the company's bottler in Myanmar, opened Pepsi-Cola
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In April 2014, Pepsi announced an exclusive supply and partnership agreement with Cartoon Network Amazone,
the world's first Cartoon Network-themed waterpark, which is set to open later in 2014. As part of the multi-year agreement, Pepsi will be the park's official snack and beverage provider.
NourishCo Beverages, a joint venture between Tata Global Beverages and PepsiCo India, announced plans to
enter the sparkling water (carbonated) segment, in August 2014. In September 2014, Quaker Oats, a division of Pepsi, launched Quaker Instant Oats Caldo, a new range of instant porridge products in the Philippines.
In October 2014, PepsiCo Foods Vietnam Company (PFVC) signed a Memorandum of Understanding (MoU)
with the Department of Agriculture and Rural Development (DARD) and the Phivang Collaboration of Farmers in
Vietnam to introduce a sustainable contract potato farming model into Vietnam. As a part of the MOU, PFVC will
agree a fixed price for the purchase of potatoes from Phivang Collaboration of Farmers at the start of each growing season. The Tostitos brand introduced the Tostitos Rolls! tortilla chips in December 2014.
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A statement by Indra K. Nooyi, the Chairman and Chief Executive Officer at Pepsi, is given below. The
statement has been taken from the company's Annual Report for FY2013.
Dear Fellow Shareholders,
Last year I described the dual goals we have unwaveringly pursued since we began our transformation back in
2007: continue to deliver the strong, consistent financial results our shareholders expect year after year, while
at the same time investing in and transforming the company to ensure it is built for long-term, sustainable growth. In short, perform while we transform.
Looking back, 2012 was an important year in PepsiCo's transformation journey. We took the necessary actions
to strengthen our company. We made significant investments behind our largest global brands. And we
changed our operating model moving from a loose federation of countries and regions to a more efficient and effective model that leverages PepsiCo's talent, capabilities and resources globally.
In 2013, we continued to reinforce these actions and began to realize the benefits. Despite a very challenging
operating environment that included economic instability and uncertainty in many of our key markets around the
world, we delivered on, or exceeded, each and every one of the financial goals we announced to shareholders at the beginning of the year.
Our performance in 2013 was strong:
- Our organic revenue grew 4%.
- Core constant currency earnings per share (EPS) grew 9%.
- Core gross margins improved by 90 basis points and core operating margins improved by 40 basis points,
even while we increased investments in the company.
- We captured more than $900 million of productivity, exceeding our target and keeping us on track to deliver
our three-year $3 billion productivity target for 2012- 2014. This success gave us the confidence to extend our goal of $1 billion in annual productivity savings for five years beyond the existing goal (2015-2019).
- Core net return on invested capital (ROIC) improved 110 basis points, 60 points ahead of our target.
- Free cash flow excluding certain items was strong at $8.2 billion.
- PepsiCo increased its annual dividend for the 41st consecutive year in 2013 and returned $6.4 billion to our
shareholders through share repurchases and dividends.
Equally important were the investments and capacity-building initiatives we undertook over the past five years
to position ourselves for superior value creation over the long term:
1. We invested to enhance the equity of our 22 billion dollar brands, which together account for more than 70%
of our total revenue. Advertising and marketing (A&M) increased and now stands at 5.9% of net revenue up
from 5.2% in 2011. More importantly, this investment led to significant brand equity improvement. For example,
brand equity scores for our global beverage and snack brands held or gained in 90% of our strategic markets,
and six of our global brands saw brand equity hold or gain in 100% of their strategic markets. Our brand-
building efforts are paying off. PepsiCo has nine of the 40 largest packaged goods trademarks in the U.S.
according to IRI, and, according to Euromonitor International, nine of the top 50 packaged food and soft drink
brands measured at Global Brand Name in Russia, seven of the top 50 in Mexico, and six of the top 50 in the U.K.
2. We fine-tuned and ramped up our innovation machine, increasing our rate of success of new innovations to
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Yogurt and Gatorade Frost Glacier Cherry. We also opened a state-of-the art food and beverage innovation
center in Shanghai, China to fuel new product, packaging and equipment innovation for our businesses
throughout Asia. Innovation as a percentage of net revenue grew to 9% in 2013, and as a whole our R&D investments have increased more than 25% since 2011.
3. Our developing and emerging markets, a major investment area, continued to perform well despite significant
volatility in key regions. As a group, our developing and emerging markets posted 10% organic revenue growth,
with particularly strong performance in China, Pakistan, Saudi Arabia, Mexico, Brazil and Turkey. Our
convenient, on-trend and affordable products, coupled with a long runway for growth in developing and emerging markets, give us confidence that they can sustain solid growth over the long term.
4. Building from our positions of strength with four of the most important nutrition platforms and brands Quaker
(grains), Tropicana (fruits and vegetables), Gatorade (sports nutrition for athletes) and Naked Juice (super-
premium juices and protein smoothies) we continued to expand our portfolio of nutritious products across
multiple markets and unlock growth opportunities in new product categories, such as dairy, hummus and other
fresh dips, and baked grain snacks. Over the last decade our nutrition business revenue has grown substantially and, in 2013, represented approximately 20% of PepsiCo's net revenue.
In 2013, we also remained focused on improving the nutritional profile of many of our social snacks and
beverages. In snacks, we continued our efforts to reduce saturated fat levels and sodium content in certain key
brands while dialing up our baked offerings and whole grains. In beverages, we added new low- and zero-
calorie choices and continued to work to reduce added sugar in certain key brands. We also continued to accelerate our research and technology investments in the development of sweetener innovation.
5. Our global go-to-market capability is one of PepsiCo's most important strategic advantages, and, in 2013, we
further reinforced this key differentiator in very tangible ways. We increased our number of routes in key
markets and greatly improved our in-store presence for our snack and beverage portfolio. We also empowered
our sales teams globally with mobile technology to help them enhance their merchandising capabilities and drive increased sales.
6. We redoubled our efforts on talent development and improved the quality of the training we offer employees
by, among other actions, investing in a new foundational leadership training program and completely revamping PepsiCo University.
PepsiCo associates are highly engaged globally as reflected in our 2013 Organizational Health Survey. An
impressive 89% of our professional and executive populations responded they are proud to work for PepsiCo,
which is well above a respected cross-industry benchmark. We have seen sustained improvement in both
employee commitment and satisfaction results over the past decade a testament to our continued focus on making PepsiCo a great place to work.
The continued focus on execution discipline to drive results in the short term, and investments to build
capabilities and advantage for the long term, has been financially rewarding for PepsiCo and our shareholders:
- Over the past decade, our net revenue compound annual growth rate was 9%.
- Today, our operating margin stands at 15%, in the top tier of our food and beverage peer group. In addition,
core net return on invested capital improved 110 basis points in 2013.
- In the last 10 years, earnings per share grew at an 8% compound annual growth rate, and we returned $57
billion in cash to shareholders through a combination of dividends and share repurchases.
- PepsiCo's Cumulative Total Shareholder Return has outpaced the S&P 500 on an annualized basis by 170
basis points since 2000.
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This strong performance is the foundation upon which we will build our future. I am more confident than ever
that PepsiCo today has the right model, capabilities, people and portfolio to continue to deliver for our consumers, customers and shareholders well into the future.
2014 and Beyond
Delivering on our 2013 financial targets demanded the very best of the entire PepsiCo management team. The
operating environment was volatile and challenging, and going forward we expect the amplitude and frequency of change only to increase.
Growth will continue to be fueled by developing and emerging markets. The growth rates of developing and
emerging markets are expected to continue to outpace developed markets for the foreseeable future. And by
2030, experts estimate an additional 3 billion people may join the middle class. These trends present excellent
growth opportunities, but will require significant investment and development of the right people, skills and tools
to compete. We have already established strong positions in developing and emerging markets, but need to continue to invest in building our capabilities in these markets to capture these growth opportunities.
The consumer shift to more nutritious products will accelerate. Trends such as a desire for convenient,
functional nutrition, local and natural ingredients, and better-for-you snack and beverage options have firmly
taken hold and will continue to accelerate around the world. We anticipated these trends early on and have
taken significant actions to balance our portfolio of offerings. Additionally, we have improved the nutritional
profile of many of our social snacks and beverages by reducing added sugar, sodium and saturated fat in key
brands. We are building from an advantaged portfolio, but need to accelerate our efforts to continue to meet this consumer demand and capture this growth opportunity.
Digital technology is disrupting every business at every point in the value chain, and the way we interact with
retailers, shoppers and consumers is changing at a dramatic pace. Being a laggard is simply not an option. In a
digital landscape that is incredibly dynamic, we are focusing on new digital tools, technologies and retail
platforms to allow us to reach consumers differently, shift our advertising and marketing model, improve our
analytics and enhance the efficiency of our sales force. Cybersecurity is also a real concern, requiring focused investment and constant diligence against threats.
We should anticipate geopolitical and social instability to be the norm, not the exception. Income inequality,
competition for natural resources, and geopolitical tensions and conflict will continue to pose risks to doing
business in many countries around the world. Doing business in this environment requires continued investment
to keep our people safe and protect our supply chain against potential threats. Fortunately, PepsiCo's local
teams have an intimate understanding of how to do business in each community in which we operate, allowing
them to adapt to changing circumstances. For example, in Egypt, amid political unrest, PepsiCo associates
ensured operations were not disrupted and looked for opportunities to expand the business even in a challenging period.
Extreme weather patterns are expected to persist, forcing companies to deal with commodity scarcity and
volatility. Warmer temperatures, erratic rainfall patterns, new pests, floods and wildfires all threaten the
productivity and availability of agricultural inputs. Our size and scale allow us to manage our commodity supply
cost and inflation risks through our centralized strategic platforms and our multiple sourcing pipelines. But
managing through these fluctuations requires additional investment and contingency planning. For example, our
R&D team is working on developing multiple formulations of various products to be able to cope with changes in raw material availability and price, while delivering on taste and quality.
This "new normal" will require continued focus and investment, and we are confident we have the ingredients
for success: geographic diversity; a complementary, related and diverse product portfolio; an efficient and
effective operating model; an experienced, top-notch management team; and a culture and ethics that are second to none.
Better Together: The Benefits of the PepsiCo Portfolio
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
PepsiCo's portfolio competes in two focused, related categories: foods and beverages. Both categories have
attractive global growth prospects of 5% or more, and our convenient foods and beverages businesses are
fairly evenly balanced, with about half of our 2013 revenue coming from each. More importantly, our categories
and products are highly complementary, sharing the same customers, consumers and occasions. It is the "related diversity" of the PepsiCo portfolio that we believe gives us an advantaged position over the competition.
The Power of PepsiCo's Portfolio to Enable the Next Wave of Growth. Foods and beverages are consumed
together, and PepsiCo's portfolio offers delicious and convenient food and beverage options for a wide range of
occasions from morning to evening. For example, our consumers might wake up to a breakfast of Quaker Real
Medleys and Trop50, enjoy a Pepsi MAX and SunChips with lunch, unwind with Stacy's pita chips, Sabra
hummus and a Lipton beverage, and host a party with an array of Frito-Lay and Pepsi products. No matter the consumer or the occasion, we seek to provide a food or beverage solution.
With joint consumer insights, R&D and innovation across foods and beverages, we have capabilities that give
us a leg up on the competition when it comes to knowing and developing what consumers want to eat and drink
throughout the day. There are overlapping "demand moments" or "need states" that could be satisfied by a food
or a beverage. Our capabilities position us to develop the best solutions, be it a food or beverage, or even something in-between, to meet the needs of our consumers.
Our portfolio allows us to capture coincident eating and drinking occasions using joint marketing and selling.
When consumers reach for a Frito-Lay snack, we want them to pair it with a refreshing Pepsi beverage or any
of our other diverse beverage offerings. Our scale and relationship with our retailers allow us to create in-store
destinations to influence consumer shopping patterns and decisions to increase this coincidence of purchase.
For example, during the 4th of July holiday season this past year in the U.S., the combination of Pepsi and
Lay's potato chips at one major retail chain drove increases in display inventory of approximately 40% and resulting gains in sales and share over the holiday.
And having both foods and beverages allows us to launch and broadly distribute new, convergent food and
beverage products for example, foods through chilled beverage distribution, beverages through ambient food distribution and convergent products that " snackify" beverages.
The Power of PepsiCo's Portfolio for Our Customers. The retail landscape today is more competitive than ever
before, including competition for share of the shopper's basket and the retail shelf. The scale, ubiquity and
related velocity of our categories make us an essential partner for retailers, who look to PepsiCo to drive a
significant share of their growth. Our relationships with our retail partners enable us to support the growth of our
complementary categories. For example, an existing PepsiCo beverage business in a market can enable us to enter the snacks business in that market.
And our broad portfolio has been a strong competitive advantage in foodservice. The runaway success of
Doritos Locos Tacos, a culinary innovation to drive growth for a PepsiCo foodservice customer, is just one
example. Doritos Locos Tacos have exceeded $1 billion in retail sales since their launch in 2012. In 2013,
PepsiCo won the Buffalo Wild Wings account, giving us access to more than 1,000 locations, by demonstrating
the advantages of our combined portfolio. Foodservice customers also see the advantage of partnering with
PepsiCo because of our access to retail partners and the option of getting foodservice customerinspired snacks onto the shelves in grocery stores.
The Structural Cost Benefits and Global Capability. Beyond what the customers and consumers see on the
shelf, our business model drives structural cost benefits of $800 million to $1 billion across PepsiCo globally
each year. These financial benefits are achieved through regional scale cost leverage obtained through
procurement, supply chain, go-to-market and selling functions, and G&A. We also see significant financial
benefits and savings from having corporate functions integrated globally, such as Global Procurement, R&D, Human Resources and Business Information Services.
Looking beyond direct cost savings, these global platforms create capability advantages for us across the entire
value chain. For example, our global marketing capabilities allow us to increase the share of dollars that go to
working A&M, facilitate the sharing of sports and talent properties, and enable "lift and shift" of brand-building
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
models. With a global R&D function, investments made are leveraged to drive innovation across both foods and beverages.
I began this letter by talking about our focus on two goals: delivering on the short term while investing for the
long term. One of the great balancing acts as CEO is to manage for both level and duration. And I believe any CEO should be able to answer the question "How are you futureproofing your company?"
As the operating environment has become more volatile and complex, this is a tall order. But I firmly believe that
the goals we articulated in 2007 under Performance with Purpose hold the answer. As long as Performance with Purpose is our guide, I believe PepsiCo will continue to deliver long-term, sustainable growth.
Performance with Purpose is PepsiCo's recognition that the company's success is inextricably linked to
society's success. In order to do well by our shareholders, we also have to take into account the needs and
concerns of a wide range of stakeholders. If our financial success comes at the expense of the environment, our consumers or our communities, we will not be viable in the long run.
In practice, Performance with Purpose means we provide a range of foods and beverages from treats to healthy
eats; we find innovative ways to minimize our impact on the environment and lower our costs through energy
and water conservation as well as reduced use of packaging material; we provide a safe and inclusive
workplace for our employees globally; and we respect, support and invest in the local communities in which we operate.
Performance with Purpose remains our true north, and it is more important than ever. I encourage you to please
take the time to read our latest Sustainability Report, which details our work and progress toward our goals around the world.
As 2014 begins, every PepsiCo associate feels an incredible sense of duty and responsibility to those who
depend on us to offer sustainable financial returns over the long term. It is for these long-term investors that we run PepsiCo.
I'm confident that PepsiCo's best days are yet to come, and I'm honored more than ever to serve as Chairman
and CEO.
PEPSICO, INC.: COMPANY OVERVIEW
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
Pepsi is one of the world's largest food and beverage companies, which primarily operates in the snacks and
beverages manufacturing space. The company has presence in over 200 countries globally, and has key presence in North America.
Pepsi's operations are organized into four business units: PepsiCo Americas Foods (PAF), PepsiCo Americas
Beverages (PAB), PepsiCo Europe, and PepsiCo Asia, Middle East and Africa (AMEA). These four business
units comprise six reportable segments: PAB, Frito-Lay North America (FLNA), Europe, Latin America Foods (LAF), AMEA, and Quaker Foods North America (QFNA).
PAF is the company's food and snack business in North and Latin America. Its portfolio of businesses includes
FLNA, QFNA and LAF.
FLNA is primarily engaged in producing, marketing, selling and distributing branded snack foods, including Lay's
potato chips, Fritos corn chips and Santitas tortilla chips. In addition, FLNA operates a joint venture with Strauss
Group, an Israeli food and beverage company, which produces, markets, sells and distributes Sabra-branded
refrigerated dips and spreads. Either independently or through contract manufacturers, FLNA's branded
products are sold to independent distributors and retailers. This segment owns or leases approximately 40 food
manufacturing and processing plants and approximately 1,710 warehouses, distribution centers and offices
across North America. In addition, FLNA's joint venture with Strauss Group also utilizes three plant facilities and one office, all of which are owned or leased by the joint venture.
QFNA is actively engaged in the production, marketing and sale of a portfolio of good-for-you products that
include cereals, rice, pasta, dairy, and other branded products. QFNA's key branded products include Quaker
oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Cap'n Crunch cereal, Quaker grits, Life
cereal, Rice-A-Roni side dishes, Quaker rice cakes, Quaker Oat Squares and Quaker Natural Granola. These
products are sold to independent distributors and retailers. QFNA owns a plant in Cedar Rapids, Iowa. It also
owns four plants and production processing facilities, and leases one office and one distribution center in North America.
LAF is the company's food and snacks business based in Latin America. This segment is responsible for
producing, marketing and selling various snack and cereal products under well-known brands like Doritos,
Mabel, as well as many Quaker-branded cereals and snacks. Primary customers of this business segment are
independent distributors and retailers. LAF has four snack manufacturing plants in Brazil (Guarulhos) and the
Mexican cities of Celaya, Monterrey and Mexico City (Vallejo). The segment also owns or leases approximately
50 food manufacturing and processing plants and approximately 640 warehouses, distribution centers and offices across Latin America.
PAB is Pepsi's beverage business unit that is engaged in marketing, selling and distribution of beverage
concentrates, fountain syrups and finished goods under various brands including Pepsi, Gatorade, Mountain
Dew, Diet Pepsi, Aquafina, 7UP (outside the US), Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist and
Mirinda. The ready-to-drink tea and coffee products portfolio is produced by PAB either independently or through
joint ventures with Unilever (under the Lipton brand name) and Starbucks. Furthermore, PAB manufactures and
distributes certain brands like Dr Pepper, Crush and Schweppes under license from Dr Pepper Snapple Group, and certain juice brands under license from Dole Food Company and Ocean Spray Cranberries.
PAB operates its own bottling plants and distribution facilities and sells branded finished goods directly to
independent distributors and retailers. It also sells concentrate and finished goods for its brands to authorized
and independent bottlers, who, in turn, sell its brands as finished goods to independent distributors and retailers
PEPSICO, INC.: COMPANY ANALYSIS
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
in certain markets. PAB owns a manufacturing facility in Florida, where the Tropicana branded products are
manufactured. It also has concentrate manufacturing plants in Cork, Ireland and a research and development
(R&D) facility in Valhalla, New York. Additionally, PAB owns or leases approximately 80 bottling and production plants and production processing facilities and about 470 warehouses, distribution centers and offices.
PepsiCo Europe, Pepsi's European business division, is engaged in producing, marketing and selling a range of
snack food brands including Lay's, Walkers, Doritos, Cheetos and Ruffles, as well as many Quaker-brand
cereals and snacks. PepsiCo Europe operates both through consolidated businesses as well as through non-
controlled affiliates. Apart from snack foods, this business division is also engaged in manufacturing, marketing
and selling of beverage concentrates, fountain syrups and finished goods under various beverage brands
including Pepsi, Pepsi Max, 7UP, Diet Pepsi and Tropicana. Furthermore, PepsiCo Europe, either independently
or through contract manufacturers, produces, markets and sells ready-to-drink tea products through an
international joint venture with Unilever (under the Lipton brand name). In addition, this division manufactures,
markets, sells and distributes a number of well-known dairy brands including Domik v Derevne, Chudo and
Agusha. PepsiCo Europe has a beverage plant in Lebedyan, Russia; a dairy plant in Moscow, Russia; a snack
manufacturing and processing plant located in Leicester, the UK (leased); and a snack R&D facility in Leicester,
the UK. It also owns or leases approximately 125 plants and approximately 525 warehouses, distribution centers and offices.
PepsiCo AMEA is the company's division operating in the Asia, Middle East and Africa regions, which markets
and sells a variety of snack food brands including Lay's, Kurkure, Chipsy, Doritos, Cheetos, and Smith's, through
consolidated businesses as well as through non-controlled affiliates. Further, either independently or through
contract manufacturers, PepsiCo AMEA produces, markets and sells several Quaker-brand cereals and snacks.
The division also produces, markets and sells beverage concentrates, fountain syrups and finished goods under
various brand names including Pepsi, Mirinda, 7UP, Mountain Dew, Aquafina and Tropicana. These branded
products are sold to authorized bottlers, independent distributors and retailers. In certain markets, PepsiCo
AMEA operates its own bottling plants and distribution facilities. Additionally, the division also operates an
international joint venture with Unilever to produce, market and sell its ready-to-drink tea products under the
Lipton brand name. PepsiCo AMEA has beverage manufacturing plants located in Egypt, Thailand and Jordan,
and has snack manufacturing and processing plants located in Egypt and Saudi Arabia. The division also owns
or leases approximately 45 plants and approximately 490 warehouses, distribution centers and offices across the AMEA region.
PEPSICO, INC.: COMPANY ANALYSIS
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
By responding to the changing preferences of its consumers, Pepsi is well positioned to capitalize on the
various opportunities created by the health and nutrition foods market in future.
PepsiCo, Inc.: Threats
Rising competition from private labels is posing a threat to national brands
The tightening economic conditions, especially in the developed and matured markets in the West are
prompting consumers to increasingly choose lower-priced private label food products, over the established
national brands. The food and beverage segment that Pepsi operates in is largely considered the non-
essential food or convenience foods segment. During the downturn, when consumers started tightening
their budgets, these segments were mostly hit. More and more people started opting for low-cost foods
and home-cooked meals as opposed to the higher priced convenience food or eating out options. As
private labels offer a value proposition by providing quality products at lower prices, more consumers are
attracted towards them, especially in the food and beverage sector. Additionally, private labels that are
manufactured by large retail houses like Kroger's Value line, Supervalu's Culinary Circle Premium Meals
and Wal-Mart's Great Value and Sam's Choice are more in demand due to their perceived quality.
According to industry sources, among all major US retail channels, private label sales increased by
approximately 3% in 2012. Since 2009, annual growth of store brands sales has averaged approximately
5%, compared to national brands sales annual growth of approximately 2%. With increasing competition
from private labels, established brands including Pepsi could be prompted to adopt more cost-focused
strategies like discounts and promotions than differentiation strategies like innovations in flavors to push
their products into the market, especially targeting the price-conscious consumers.
Water scarcity and poor quality could impact production costs and capacity
Water is one of key ingredients used by Pepsi to manufacture its beverage products. Rapid population
growth and continued pollution of existing freshwater sources have created water shortages in nearly
every country. The competition for water among domestic, agricultural and manufacturing users is
increasing in the countries where the company operates. The consumption rate of water globally is
doubling every 20 years, more than twice the rate of human population growth. According to the United
Nations (UN), by 2030 nearly half the world's population may face water scarcity, with demand exceeding
supply significantly. As a result, Pepsi may incur increasing production costs or face capacity constraints,
which could affect its profitability in the long run.
Rising labor wages and healthcare costs in the US
The labor costs for companies in the US have been rising as the healthcare costs and wages increased in
the recent times. Tight labor markets, increased overtime, government mandated increases in minimum
wages and a higher proportion of full-time employees are resulting in an increase in labor costs. The
federal minimum wage rate in the US, which remained at $5.15 per hour since 1998, increased to $5.85
per hour in 2008. It further increased to $6.55 per hour in 2009 and to $7.25 per hour in 2010. Moreover,
many states and municipalities in the country have a minimum wage rate even higher than $7.25 per hour
due to higher cost of living. The minimum wage rate has increased in the states of Arizona (from $7.8 in
2013 to $7.9 in 2014), Colorado (from $7.78 in 2013 to $8 in 2014), Florida (from $7.79 in 2013 to $7.93 in
2014), Ohio (from $7.85 in 2013 to $7.95 in 2014), Oregon (from $8.95 in 2013 to $9.1 in 2014) and
Washington (from $9.19 in 2013 to $9.32 in 2014) in the recent past. In addition, the healthcare costs for
employers in the US are increasing. According to industry estimates, healthcare costs for the US
employers are estimated to grow by 7% in 2014 compared to 2013.
Pepsi employed 274,000 people at the end of FY2013, of which nearly 106,000 people were employed in the US. Thus, rising labor costs can further weigh down on its profit margins.
PEPSICO, INC.: CORPORATE FINANCIAL DEALS ACTIVITY
PepsiCo, Inc. - STRATEGY, SWOT AND CORPORATE FINANCE REPORT 2D95A557-82B0-4089-986A-49989FAA8ED4 / Published 01/2015
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Notes
*YTD (Year To Date) – The period beginning January 1st of the current year up until today's date.
*TTM (Trailing Twelve Months) – The timeframe of the past 12 months.