PepsiCo is a Fortune 500 company headquartered in New York that manufactures and markets beverages and snacks. Its main product is Pepsi Cola, which sells over 100 billion cans per year. PepsiCo was formed through mergers and acquisitions of brands like Frito-Lay, Quaker Oats, Gatorade, Tropicana, and others. It operates globally with products in nearly 200 countries and regions. Indra Nooyi has been CEO since 2006 and has focused on healthier products and sustainability. PepsiCo is organized into divisions for Americas Foods, Americas Beverages, and International markets.
2. INTRODUCTION.
PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American multinational
corporation headquartered in Purchase, NY with interests in manufacturing and
marketing a wide variety of carbonated and non-carbonated beverages, as well as
salty, sweet and grain -based snacks, and other foods.
Their main product, Pepsi Cola, sells over 100 billion cans a year. Besides the
Pepsi-Cola brands, the company owns other brands such as Quaker Oats,
Gatorade, Frito-Lay, Tropicana, Copella, Mountain Dew, Miranda and 7-Up
(outside the USA).
PepsiCo has 18 different product lines that offers a variety of
high quality products providing refreshment and nutrition. PepsiCo brands are
available in nearly 200 countries and union territories.
It is the 2nd largest manufacturer of soft drinks in the world.
3. CONT’D
PepsiCo was founded in 1965 through the merger of Pepsi-Cola
and Frito-Lay. Tropicana was acquired and PepsiCo merged with the Quaker Oats
Company, including Gatorade .
Pepsi-Cola began selling its products internationally in 1934 with its operations in
Canada. Operations grew rapidly in the 1950’s.
Key international markets include Argentina, Brazil, China, India, Mexico, Philippines,
Saudi Arabia, Spain, Thailand and the United Kingdom. PepsiCo Beverages
International, also produces, sells and distributes Gatorade sports drinks as well as
Tropicana and other juices internationally.
In the 1970s and '80s PepsiCo bought restaurant chains such as Pizza Hut, Taco Bell,
and Kentucky Fried Chicken which was later changed to KFC, but in 1997 it spun off its
restaurant business into a separate company, Tricon Global Restaurants.
4. Indra Krishnamurthy Nooyi , who was ranked
No. 11 in Fortune's list of the most powerful
women in business, joined the company in 1994
and was named CEO in 2001. She was born in
India and has done her education in India .
She has been the chief executive of PepsiCo
since 2006. During her time, healthier snacks
have been marketed and the company is striving
for a net-zero impact on the environment. This
focus on healthier foods and lifestyles is part of
Nooyi's "Performance With Purpose" philosophy.
7. Soft drinks, more popularly known as sodas, are not
exactly referred to as items of necessity. Sodas stand
between liquor and juice. Those who are too young to
drink beer but think fruit juice is too juvenile will go on
to sodas.
8. Frito-Lay merged with Pepsi-Cola in 1965.Frito-Lay
brands account for 59% of the U.S. snack chip industry.
The Frito Lay delivers a wide variety of fun and
environmentally friendly foods in around 160 countries
and territories.
9. PepsiCo acquired Tropicana in 1998. Today the Tropicana
brand is available in 63 countries. Tropicana’s pure and
fresh fruit juice in easy to handle packages has attracted
the consumers.
10. PepsiCo merged with The Quaker Oats Company in 2001.
Quaker's power-packed line of popular brands expands
companies portfolio with a wide range of healthy food
choices.
11. Gatorade sports drinks was acquired by the Quaker Oats
Company in 1983 and became a part of PepsiCo with the
merger in 2001. Gatorade is the first isotonic sports drink.
Created in 1965 by researchers at the University of Florida for
the school's football team, "The Gators," Gatorade is now the
world's leading sport's drink.
13. PepsiCo is organized in three business units, as follows:
PepsiCo Americas Foods (PAF), which includes Frito-Lay North America, Quaker
Foods North America and all of our Latin American food and snack
businesses (LAF).
PepsiCo Americas Beverages (PAB), which includes PepsiCo Beverages North
America and all of our Latin America beverage businesses.
PepsiCo International (PI), which includes all PepsiCo businesses in the United
Kingdom, Europe, Asia, the Middle East and Africa.
PepsiCo's three business units were comprised of six reportable segments, as
follows:
14. CONT’D…
Frito-Lay North America (FLNA)
FLNA's most significant properties include its headquarters building and a
research facility in Plano, Tex., both of which are owned.
FLNA also owns or leases approximately 40 food manufacturing and
processing plants and approximately 1,750 warehouses, distribution centers
and offices.
FLNA also utilizes approximately 55 plants and production processing facilities
that are owned or leased by contract manufacturers or co-packers.
Quaker Foods North America (QFNA)
QFNA owns a plant in Cedar Rapids, Iowa, which is its most significant
property.
QFNA also owns or leases five plants and production processing facilities in
North America.
QFNA utilizes approximately 25 manufacturing plants, production processing
facilities and distribution centers that are owned or leased by our contract
manufacturers or co-packers
15. CONT’D
Latin America Foods (LAF)
LAF's most significant properties include a food plant in Celaya, Mexico, and three
snacks plants in the Mexican cities which are owned.
LAF also owns or leases approximately 50 food manufacturing and processing
plants and approximately 660 warehouses, distribution centers and offices.
LAF also utilizes one plant facility that is owned by a contract manufacturer.
PepsiCo Americas Beverages (PAB)
PAB also owns or leases approximately 40 plants and production processing
facilities and approximately 50 warehouses, distribution centers, and offices.
In addition, authorized bottlers in which they have an ownership interest own or
lease approximately 65 bottling plants.
PAB also utilizes approximately 70 plants and production processing facilities and
approximately 60 warehouses and distribution centers that are owned or leased by
contract manufacturers or co-packers.
16. CONT’D
United kingdom and Europe
Europe's most significant properties are its snack manufacturing and
processing plants located in U.K., each of which are owned.
Europe also owns or leases approximately 35 plants and approximately 320
warehouses, distribution centers and offices.
In addition, authorized bottlers in which they have an ownership interest own or
lease seven plants and approximately 30 distribution centers.
Europe also utilizes approximately one plant and production processing facility
and approximately two distribution centers that are owned or leased by contract
manufacturers.
Asia, Middle East & Africa (AMEA)
AMEA's most significant properties are its beverage plant located in Shenzhen,
China, and its snack manufacturing and processing plant located in Tingalpa,
Australia, each of which are owned.
AMEA also owns or leases approximately 100 plants and approximately 1,100
warehouses, distribution centers and offices. In addition, authorized bottlers in
which they have an ownership interest own or lease approximately 25 plants
and 120 distribution centers.
AMEA also utilizes two plants and production processing facilities that are
owned or leased by contract manufacturers.
17.
18. o PepsiCo and its partners have invested more than US$ 700 million in India -
building businesses, which today provide direct or indirect employment to
more than 150,000 people
o PepsiCo entered India’s hot beverages category in2003 through a tie-up with
Hindustan Lever Ltd.,a leader in hot beverages and owner of the Lipton
brand. To produce its beverages, PepsiCo has 37 bottling plants in India,
including 17 company-owned plants and 20 owned by franchisee partners.
o FritoLay India is one of the market leaders in the Indian snack foods
segment and has other brands like Cheetos (potato wafers), Qauker Oats
and Aliva low fat baked biscuits. The Lays potato chips, however,
dominates the other brands.
19. o Frito-Lay, the snack food division of PepsiCo India, is contemplating
export of indigenously-developed products Kurkure and Aliva to markets
such as the US and UK. Kurkure, a cheeto-like snack is already exported
to Pakistan. Aliva, a cracker launched last year, is yet to be exported
o The flavor concentrates used to make soft drinks are produced at a separate
state-of-the-art plant at Channo in the Sangrur district of Punjab and supplied
all across South Asia.
o PepsiCo has invested heavily in building local production facilities and
transferring agro technology to the country. The company also undertakes
contract farming across the country to source raw materials for its
products.
20. SWOT ANALYSIS.
This SWOT analysis also shows PepsiCo's internal strengths such as their
experienced management team, a competitive product line, a global marketing realm,
and the continuous efforts by their research and development to research trends in
the industry and to be creative in exploiting those trends.
A few weaknesses lie in the fact that the company is so large and could possibly lose
focus or have internal conflict problems.
Some possible opportunities noted in the SWOT analysis are the growing markets for
specialized ethnic foods and healthier food products. Another opportunity is that the
income of consumers is high enabling them to be less price sensitive, and
convenience is becoming evermore important not only to the United States but to
many countries around the world.
A few of the threats PepsiCo must stay aware of are the ease of reliability of its
product line, the almost pure competition in pricing for its products, and the quickness
of technological advances causing existing products to be no longer the most
advanced.
21. FINANCE.
PepsiCo shares are traded principally on the New York Stock Exchange in the
United States.
The company is also listed on the Amsterdam, Chicago, Swiss and Tokyo stock
exchanges.
PepsiCo has consistently paid cash dividends since the corporation was founded.
There are more than 53 million shareholders of Pepsico company.
22. MARKETING
In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where
PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During
these blind taste tests the majority of participants picked Pepsi as the better
tasting of the two soft drinks. PepsiCo took great advantage of the campaign with
television commercials reporting the results to the public.
In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi
salesperson, Denise Muck, to coincide with the United States bicentennial
celebration.
In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy.
By 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless
Wonders" that "helped redefine promotion marketing."
In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first
time, included more than thirty different backgrounds on each can, introducing a
new background every three weeks. One of their background designs includes a
string of repetitive numbers 73774. This is a numerical expression from a
telephone keypad of the word "Pepsi."
23. CONT’D
In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a
minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of their
can and bottle designs. Also in 4th quarter of 2008 Pepsi teamed up with Google to produce the
first daily entertainment show on YouTube, Pop tub. This daily show deals with pop culture,
internet viral videos, and celebrity gossip. Pop tub is updated daily from Pepsi.
Since 2007, Pepsi, Lay's and Gatorade have had a "Bring Home the Cup," contest for Canada's
biggest hockey fans. Hockey fans were asked to submit content (videos, pictures or essays) for a
chance at winning a party in their hometown with the Stanley Cup and Mark Messier.
In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new
installment of the campaign asks for team involvement and an advocate to submit content on
behalf of their team for the chance to have the Stanley Cup delivered to the team's home town by
Mark Messier.
24. CONT’D
Pepsi has official sponsorship deals with three of the four major North American
professional sports leagues: the National Football League, National Hockey League and
Major League Baseball. Pepsi also sponsors Major League Soccer.
Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket
team is just one of the teams that the brand sponsors. The team wears the Pepsi logo
on the front of their test and ODI test match clothing.
On July 6, 2009, Pepsi announced it would make a $1 billion investment in Russia over
three years, bringing the total Pepsi investment in the country to $4 billion.
In July 2009, Pepsi started marketing itself as Pecs in Argentina in response to its name
being mispronounced by 25% of the population and as a way to connect more with all of
the population.
25. CONT’D
In October 2008, Pepsi announced that it would be redesigning its logo and re-branding
many of its products by early 2009. In 2009, Pepsi, Diet Pepsi and Pepsi Max began
using all lower-case fonts for name brands, and Diet Pepsi Max was re-branded as
Pepsi Max.
The brand's blue and red globe trademark became a series of "smiles," with the central
white band arcing at different angles depending on the product. Pepsi released this logo
in U.S. in late 2008, and later it was released in 2009 in Canada (the first country outside
of the United States for Pepsi's new logo), Brazil, Bolivia, Guatemala, Nicaragua,
Honduras, El Salvador, Colombia, Argentina, Puerto Rico, Costa Rica, Panama, Chile,
Dominican Republic, the Philippines and Australia; in the rest of the world the new logo
will be released in 2010, meaning the old logo has been phased out entirely (most
recently, France and Mexico switched to Pepsi's current logo). As of Present, The UK
has started to use the new Pepsi logo on cans in an order different from the US can.
Pepsi and Pepsi Max cans and bottles in Australia now carry the localized version of the
new Pepsi Logo. The word Pepsi and the logo are in the new style, while the word "Max"
is still in the previous style. Pepsi Wild Cherry has finally received the 2008 Pepsi design
in March 2010
26. HUMAN RESOURCE POLICIES.
PepsiCo always strive to:
Care for customers, consumers and the world we live in. They are driven by an intense,
competitive spirit in the marketplace, but they direct this spirit towards solutions that
achieve a win for each of there constituents as well as a win for the corporation.
Sell only products company can be proud of. This principle extends to every part of the
business, from the purchasing of ingredients to the point where the products reach the
consumer’s hands.
Speak with truth and candor. They speak up, telling the whole picture, not just what is
convenient to achieving individual goals. In addition to being clear, honest and accurate,
they take responsibility to ensure that communications are understood.
Balance short term and long term. The company make decisions that hold both short-
term and long-term risks and benefits in balance over time. Without this balance, they
cannot achieve the goal of sustainable growth.
27. CONT’D
Win with diversity and inclusion. PepsiCo leverage a work environment that embraces
people with diverse backgrounds, traits and different ways of thinking. This leads to
innovation, the ability to identify new market opportunities, all of which helps develop
new products and drives the companies ability to sustain there commitments to growth
through empowered people.
Respect others and succeed together. The company is built on individual excellence and
personal accountability, but no one can achieve our goals by acting alone. They give
importance to people who have the capability of working together in structured teams or
informal collaboration. A spirit of fun, the value they put on teamwork has made the
company which people enjoy being part of, and this enables them to deliver world-class
performance.