About PepsiCo Inc

PepsiCo, Inc. operates as beverage and convenient food company.

The company has a portfolio of brands, including Lays, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream. Through its operations, authorized bottlers, contract manufacturers and other third parties, the company makes, markets, distributes and sells various beverages and convenient foods, serving customers and consumers in approximately 200 countries and territories.

Segments

The company operates through seven segments Frito-Lay North America (FLNA); Quaker Foods North America (QFNA); PepsiCo Beverages North America (PBNA); Latin America (LatAm); Europe; Africa, Middle East and South Asia (AMESA); and Asia Pacific, Australia and New Zealand and China Region (APAC).

FLNA

This segment includes the company’s branded convenient food businesses in the United States and Canada. Either independently or in conjunction with third parties, FLNA makes, markets, distributes and sells branded convenient foods. These foods include branded dips, Cheetos cheese-flavored snacks, Doritos tortilla chips, Fritos corn chips, Lay’s potato chips, Ruffles potato chips and Tostitos tortilla chips. FLNA’s branded products are sold to independent distributors and retailers. In addition, FLNA’s joint venture with Strauss Group makes, markets, distributes and sells Sabra refrigerated dips and spreads.

QFNA

This segment includes the company’s branded convenient food businesses, such as cereal, rice, pasta and other branded food, in the United States and Canada.

Either independently or in conjunction with third parties, QFNA makes, markets, distributes and sells branded convenient foods, which include cereals, rice, pasta and other branded products. QFNA’s products include Cap’n Crunch cereal, Life cereal, Pearl Milling Company syrups and mixes, Quaker Chewy granola bars, Quaker grits, Quaker oatmeal, Quaker rice cakes, Quaker Simply Granola and Rice-A-Roni side dishes. QFNA’s branded products are sold to independent distributors and retailers.

PBNA

This segment includes the company’s beverage businesses in the United States and Canada. Either independently or in conjunction with third parties, this segment makes, markets and sells beverage concentrates, fountain syrups and finished goods under various beverage brands, including Aquafina, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Pepsi and Propel. This segment operates its own bottling plants and distribution facilities and sells branded finished goods directly to independent distributors and retailers. This segment also sells concentrate and finished goods for the company’s brands to authorized and independent bottlers, who in turn sell its branded finished goods to independent distributors and retailers in certain markets. This segment also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea and coffee products through joint ventures with Unilever (under the Lipton brand name) and Starbucks, respectively. Further, this segment manufactures and distributes certain brands licensed from Keurig Dr Pepper Inc., including Crush, Dr Pepper and Schweppes, and certain juice brands licensed from Dole Food Company, Inc. and Ocean Spray Cranberries, Inc. (Ocean Spray). In 2022, the company sold its Tropicana, Naked and other select juice brands to PAI Partners, while retaining a 39% noncontrolling interest in a newly formed joint venture that would operate across North America and Europe. In the U.S., PepsiCo acts as the exclusive distributor for the new joint venture’s portfolio of brands for small-format and foodservice customers with chilled direct-store-delivery.

LatAm

This segment includes all of the company’s beverage and convenient food businesses in Latin America. Either independently or in conjunction with third parties, this segment makes, markets, distributes and sells various convenient food brands, including Cheetos, Doritos, Emperador, Lay’s, Mabel, Marias Gamesa, Ruffles, Sabritas, Saladitas and Tostitos, as well as various Quaker-branded convenient foods. This segment also, either independently or in conjunction with third parties, makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands, including 7UP, Gatorade, H2oh!, Manzanita Sol, Mirinda, Pepsi, Pepsi Black, San Carlos and Toddy. These branded products are sold to authorized and independent bottlers, independent distributors and retailers. This segment also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).

Europe

This segment includes the company’s beverage and convenient food businesses in Europe. Either independently or in conjunction with third parties, Europe makes, markets, distributes and sells various convenient food brands, including Cheetos, Chipita, Doritos, Lay’s, Ruffles and Walkers, as well as various Quaker-branded convenient foods, through consolidated businesses, as well as through noncontrolled affiliates. Europe also, either independently or in conjunction with third parties, makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands, including 7UP, Diet Pepsi, Lubimy Sad, Mirinda, Pepsi and Pepsi Max. These branded products are sold to authorized and independent bottlers, independent distributors and retailers. In certain markets, however, Europe operates its own bottling plants and distribution facilities. Europe also, as part of its beverage business, manufactures and distributes SodaStream sparkling water makers and related products. Further, Europe makes, markets, distributes and sells various dairy products, including Agusha, Chudo and Domik v Derevne. Europe also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name). In 2022, the company sold its Tropicana, Naked and other select juice brands to PAI Partners, while retaining a 39% noncontrolling interest in a newly formed joint venture that would operate across North America and Europe.

AMESA

This segment includes the company’s beverage and convenient food businesses in Africa, the Middle East and South Asia. Either independently or in conjunction with third parties, this segment makes, markets, distributes and sells various convenient food brands, including Chipsy, Doritos, Kurkure, Lay’s, Sasko, Spekko and White Star, as well as various Quaker-branded convenient foods, through consolidated businesses, as well as through noncontrolled affiliates. This segment also makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands, including 7UP, Aquafina, Mirinda, Mountain Dew and Pepsi. These branded products are sold to authorized and independent bottlers, independent distributors and retailers. In certain markets, however, this segment operates its own bottling plants and distribution facilities. This segment also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).

APAC

This segment includes the company’s beverage and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region. Either independently or in conjunction with third parties, this segment makes, markets, distributes and sells various convenient food brands, including BaiCaoWei, Cheetos, Doritos, Lay’s and Smith’s, as well as various Quaker-branded convenient foods, through consolidated businesses, as well as through noncontrolled affiliates. This segment also makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands, including 7UP, Aquafina, Mirinda, Mountain Dew, Pepsi and Sting. These branded products are sold to authorized and independent bottlers, independent distributors and retailers. This segment also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name). Further, this segment licenses the Tropicana brand for use in China on co-branded juice products in connection with a strategic alliance with Tingyi (Cayman Islands) Holding Corp.

Distribution Network

The company’s products are primarily brought to market through direct-store-delivery (DSD), customer warehouse and distributor networks and are also sold directly to consumers through e-commerce platforms and retailers. The distribution system used depends on customer needs, product characteristics and local trade practices.

Direct-Store-Delivery

The company, its independent bottlers and its distributors operate DSD systems that deliver beverages and convenient foods directly to retail stores where the products are merchandised by its employees or its independent bottlers. DSD is primarily suited to products that are restocked often and respond to in-store promotion and merchandising.

Customer Warehouse

The company’s various products are delivered from its manufacturing plants and distribution centers, both company and third-party operated, to customer warehouses.

Distributor Networks

The company distributes majority of its products through third-party distributors. Its foodservice and vending business distributes beverages and convenient foods to restaurants, businesses, schools and stadiums through third-party foodservice and vending distributors and operators.

E-commerce

The company’s products are also available and sold directly to consumers on various company-owned and third-party e-commerce websites and mobile commerce applications.

Customers

The company’s customers include wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, among others. It grants its independent bottlers exclusive contracts to sell and manufacture certain beverage products bearing its trademarks within a specific geographic area. These arrangements provide the company with the right to charge its independent bottlers for concentrate, finished goods and Aquafina royalties and specify the manufacturing process required for product quality. The company also grants distribution rights to its independent bottlers for certain beverage products bearing its trademarks for specified geographic areas.

The company relies on and provides financial incentives to its customers to assist in the distribution and promotion of its products to the consumer. For its independent distributors and retailers, these incentives include volume-based rebates, product placement fees, promotions and displays.

In 2021, sales to Walmart Inc. (Walmart) and its affiliates, including Sam’s Club, represented approximately 13% of the company’s consolidated net revenue, with sales reported across all of its divisions, including concentrate sales to its independent bottlers, which were used in finished goods sold by them to Walmart.

Brands and Intellectual Property Rights

The company owns various trademarks, which are major to its worldwide businesses, including Agusha, Amp Energy, Aquafina, Aquafina Flavorsplash, Arto Lifewtr, BaiCaoWei, Bare, Bokomo, Bolt24, bubly, Cap’n Crunch, Ceres, Cheetos, Chester’s, Chipita, Chipsy, Chokis, Chudo, Cracker Jack, Crunchy, Diet Mountain Dew, Diet Mug, Diet Pepsi, Diet 7UP (outside the United States), Domik v Derevne, Doritos, Driftwell, Duyvis, Elma Chips, Emperador, Evolve, Frito-Lay, Fritos, Fruktovy Sad, G2, Gamesa, Gatorade, Gatorade Zero, Gatorlyte, Grandma’s, H2oh!, Health Warrior, Imunele, J7, Kas, Kurkure, Lay’s, Life, Lifewtr, Liquifruit, Lubimy, Mabel, Manzanita Sol, Marias Gamesa, Matutano, Mirinda, Miss Vickie’s, Moirs, Mother’s, Mountain Dew, Mountain Dew Code Red, Mountain Dew Game Fuel, Mountain Dew Kickstart, Mountain Dew Zero Sugar, MTN Dew Energy, Mug, Munchies, Muscle Milk, Near East, Off the Eaten Path, Paso de los Toros, Pasta Roni, Pearl Milling Company, Pepsi, Pepsi Black, Pepsi Max, Pepsi Zero Sugar, PopCorners, Pronutro, Propel, Quaker, Quaker Chewy, Quaker Simply Granola, Rice-A-Roni, Rockstar Energy, Rold Gold, Ruffles, Sabritas, Safari, Sakata, Saladitas, San Carlos, Sandora, Santitas, Sasko, 7UP (outside the United States), 7UP Free (outside the United States), Sierra Mist, Sierra Mist Zero Sugar, Simba, Smartfood, Smith’s, Snack a Jacks, SoBe, SodaStream, Sonric’s, Spekko, Stacy’s, Sting, Stubborn Soda, SunChips, Toddy, Toddynho, Tostitos, V Water, Vesely Molochnik, Walkers, Weetbix, White Star, Ya and Yachak. It also holds long-term licenses to use trademarks in connection with its products in certain markets, including Ocean Spray. The company also distributes Bang Energy drinks and various Keurig Dr Pepper Inc. brands, including Dr Pepper in certain markets, Crush and Schweppes. Joint ventures in which it has an ownership interest either own or has the right to use certain trademarks, such as Lipton, Sabra and Starbucks. In addition, in 2022, the company sold its Tropicana, Naked and other select juice brands to PAI Partners, while retaining a 39% noncontrolling interest in a newly formed joint venture that would operate across North America and Europe. In the U.S., PepsiCo acts as the exclusive distributor for the new joint venture’s portfolio of brands for small-format and foodservice customers with chilled direct-store-delivery.

In 2022, the company would also begin to distribute Hard MTN Dew, an alcoholic beverage manufactured and owned by the Boston Beer Company. It has licensed the use of the Hard MTN Dew trademark to the Boston Beer Company, which has appointed it as their distributor for this product.

Seasonality

The company’s businesses are affected by seasonal variations. Its beverage and convenient food sales are highest in the third quarter (year ended December 2021) due to seasonal and holiday-related patterns and generally lowest in the first quarter.

Research and Development

The company’s research and development costs were $752 million in 2021.

Regulatory Matters

The U.S. laws and regulations that the company is subject to include but are not limited to the Federal Food, Drug and Cosmetic Act and various state laws governing food safety; the Food Safety Modernization Act; the Occupational Safety and Health Act and various state laws and regulations governing workplace health and safety; various federal, state and local environmental protection laws, as discussed below; the Federal Motor Carrier Safety Act; the Federal Trade Commission Act; the Lanham Act; various federal and state laws and regulations governing competition and trade practices; various federal and state laws and regulations governing its employment practices, including those related to equal employment opportunity, such as the Equal Employment Opportunity Act and the National Labor Relations Act and those related to overtime compensation, such as the Fair Labor Standards Act; data privacy and personal data protection laws and regulations, including the California Consumer Privacy Act of 2018; customs and foreign trade laws and regulations, including laws regarding the import or export of its products or ingredients used in its products and tariffs; laws regulating the sale of certain of its products in schools; laws regulating its supply chain, including the 2010 California Transparency in Supply Chains Act and laws relating to the payment of taxes.

The company is also required to comply with the Foreign Corrupt Practices Act and the Trade Sanctions Reform and Export Enhancement Act. It is also subject to various state and local statutes and regulations, including state consumer protection laws such as Proposition 65 in California, which requires that a specific warning appear on any product that contains a substance listed by the state of California as having been found to cause cancer or birth defects, unless the amount of such substance in the product is below a safe harbor level.

The company is subject to various similar and other laws and regulations outside the United States, including but not limited to laws and regulations governing food safety, international trade and tariffs, supply chain, including the U.K. Modern Slavery Act, occupational health and safety, competition, anti-corruption and data privacy, including the European Union General Data Protection Regulation. In various jurisdictions, compliance with competition laws is of special importance to the company due to its competitive position in those jurisdictions, as is compliance with anti-corruption laws, including the U.K. Bribery Act. The company relies on legal and operational compliance programs, as well as in-house and outside counsel and other experts, to guide its businesses in complying with the laws and regulations worldwide that apply to its businesses.

In the United States, the company’s facilities must comply with the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act and other federal and state laws regarding handling, storage, release and disposal of wastes generated onsite and sent to third-party owned and operated offsite licensed facilities and its facilities outside the United States must comply with similar laws and regulations.

Competition

In various countries in which the company’s products are sold, including the United States, The Coca-Cola Company is its primary beverage competitor. Other beverage and convenient food competitors include, but are not limited to, Campbell Soup Company; Conagra Brands, Inc.; Hormel Foods Corporation; Kellogg Company; Keurig Dr Pepper Inc.; The Kraft Heinz Company; Link Snacks, Inc.; Mondelez International, Inc.; Monster Beverage Corporation; Nestlé S.A.; Red Bull GmbH; and Utz Brands, Inc.

History

PepsiCo, Inc. was founded in 1898. The company was incorporated in Delaware in 1919 and was reincorporated in North Carolina in 1986.

Country
Industry:
Beverages
Founded:
1898
IPO Date:
01/02/1968
ISIN Number:
I_US7134481081
Address:
700 Anderson Hill Road, Purchase, New York, 10577, United States
Phone Number
914 253 2000

Key Executives

CEO:
Laguarta, Ramon
CFO
Johnston, Hugh
COO:
Roden, Gregg