PepsiCo

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If PepsiCo has a chip on its shoulder about always being second in the cola market to Coke, at least the company puts it to good use. The biggest slice of PepsiCo's business now comes from Frito-Lay, the world's leading manufacturer of potato chips. The group was also far quicker than its rival to exploit the fast-growing non-carbonated market. Smart acquisitions such as Tropicana juice and sports drink Gatorade, a solid presence in bottled water with Aquafina and others, and globe-spanning partnerships with Unilever's Lipton and Starbucks have helped to counter its rival's strength in restaurant "fountain sales". However, PepsiCo has struggled in recent years to maintain growth in its carbonated drinks portfolio. A massive investment since 2008 in "Project Refresh", which aimed to completely rejuvenate the group's brands, yielded only limited results and the group was forced to combat activist investors calling for the drinks and snacks businesses to demerge as two separate companies. Combined revenues rose 13% in 2021 to $79.5bn, with net income of $7.7bn. Beverages contributed roughly 45% of the global total and snacks the remaining 55%. That beverages business is stronger in the US than elsewhere - PepsiCo actually has a higher share of total US finished "liquid refreshment" retail sales than Coca-Cola, but the latter has virtual dominance of "fountain" sales in restaurants and bars. The group has a vast portfolio of brands. Gatorade and Tropicana both have a massive global footprint slightly behind Pepsi. Other brands include Mtn Dew, Sierra Mist and Propel, mainly in the US; global partnerships with Unilever for Lipton Ice Tea and with Starbucks for RTD products; 7Up outside North America, Mirinda, H2oh!, Sodastream sparkling water makers globally and Agusha, Chuda and Domik v Derevne dairy products in Eastern Europe. The vast global Frito-Lay snacks empire is partnered by Quaker Foods cereal and snack brands. The US alone accounts for 57% of sales and Mexico and Canada together for a further 10%. Russia is the group's 3rd largest market - famously Pepsi became in 1972 the first American consumer brand to be sold there, and PepsiCo is now the local leader in food and beverages as a result of purchases including fruit juice marketer Lebedyansky and juice and dairy giant Wimm-Bill-Dann. The UK is the 5th largest market through local subsidiairies Britvic and Walkers. Ramon Laguarta succeeded Indra Nooyi as CEO in 2018.

Capsule checked 16th August 2021

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See also:

Pepsi
Frito-Lay
Lipton Ice Tea
Walkers Crisps
Britvic

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Advertising expenditure of PepsiCo? See ranking of Declared Advertising Costs

Who are the competitors of PepsiCo? See Food Sector and Non-Alcoholic Beverages Sector indexes

Historical profile information for PepsiCo

Recent stories from Adbrands Update:

Marketer Moves 22nd Jun 2022: New leadership at Gatorade and PepsiCo Foods Canada. See Marketer Moves (members only).

Marketer Moves 20th Apr 2022: New CMO at PepsiCo Foods Canada. See Marketer Moves (members only).

Adbrands Update 9th Mar 2022: McDonald's, PepsiCo and Coca-Cola finally bowed to growing pressure from customers, investors and indeed their own staff to suspend operations in Russia in the wake of President's Putin's invasion of Ukraine. All with significant business in what is now increasingly a pariah nation, they were among the most important names to join the flood exiting that country. McDonald's said it was closing all its outlets in Russia but will continue to pay its 62,000 local employees, and almost all the other companies quitting the country have vowed to continue offering support to their local staff. PepsiCo, which generated sales of $3.4bn in Russia last year, is ending sales of its international beverage brands but will continue to sell potato chips as well as its local dairy, juice and baby formula products. It said it was investigating a write-off of that business. Other new additions in the past 24 hours to the list of companies suspending operations in Russia are Starbucks and Yum Brands, whose businesses are operated in Russia by local licensees, as well as Unilever and Procter & Gamble, Heineken, Universal Music Group and Imperial Brands.

Adbrands Update 8th Mar 2022: Though many Western companies have been quick to suspend operations in Russia in protest at the brutal invasion of Ukraine, there are some notable holdouts. Among the most significant are McDonald's and PepsiCo. The Russian outlets of other fast-feeders such as KFC, Subway and Starbucks are almost all run by local franchisees, but McDonald's owns 712 of its 847 restaurants in Russia (and it also owns all 108 outlets in Ukraine). The Russian restaurants are continuing to operate normally, and the company has made no statement about the war. With famously long-standing roots in Russia dating back to the 1970s, PepsiCo is now that country's biggest food and drink business, offering a wide variety of products including international brands as well as local jewels in the fruit juice, dairy, infant foods and bottled water segments. It too has avoided any comment on the war and continues to operate normally. Coca-Cola and Mondelez are among the other companies that are continuing to trade normally in Russia.

Marketer Moves 4th Feb 2022: New CEO at Tropicana Brands Group. See Marketer Moves (members only).

Adbrands Daily Update 11th Aug 2021: In another strategic shift, PepsiCo is to dip its toe into alcoholic beverages in 2022 in a partnership with Boston Beer, makers of Samuel Adams and Angry Orchard. The two companies will team up to produce Hard Mtn Dew, a boozy version of PepsiCo's popular soft drink with 5% ABV. Boston Beer will make the drink, and PepsiCo will market and distribute it. Coca-Cola has already entered the flavoured alcoholic beverages sector with its Lemon-do brand in Japan and Topo Chico Hard Seltzer, a partnership with Molson Coors, in the US and Europe.

Adbrands Daily Update 3rd Aug 2021: In a surprise development, PepsiCo announced plans to sell Tropicana, Naked and its other fruit juice brands in North America to private equity investor PAI Partners in a deal valued at $4.5bn. PepsiCo will receive $3.3bn in cash and will retain a 39% stake as well as exclusive distribution rights. The business has been under pressure for several years. Sales in 2020 were around $3bn but profit margins have been slipping steadily, and PepsiCo wants to focus its attention on more lucrative lines. Tropicana was created in 1947 by Sicilian immigrant Anthony Rossi, who pioneered the invention of flash pasteurisation to allow a longer shelf life for fresh juice, which had previously been available nationally only in frozen concentrated form. It was acquired by Beatrice Foods in 1978, then by Seagram Company ten years later, before being acquired by PepsiCo in 1998.

Adbrands Daily Update 18th Mar 2021: It used to be just the sportswear companies that battled one another for multi-year, multi-billion-dolar endorsement contracts with sports stars. Now soft drinks are getting in on the act too. PepsiCo have signed basketball giant and pop cultural icon LeBron James to just such a deal, ousting Coca-Cola whose Sprite and Powerade he has promoted for almost two decades. No terms were disclosed. James' first outing for PepsiCo is the Mountain Dew energy spin-off Mtn Dew Rise. PepsiCo energy drinks CMO Fabiola Torres says Rise is aimed at people "looking for a morning boost with enhanced mental clarity and immune support that helps you conquer the morning to conquer the day. LeBron is the epitome of motivation and has achieved legendary status by seizing every morning. He not only continues to excel on and off the court but has dedicated his life to help others rise as well."

Adbrands Daily Update 10th Feb 2021: More than six months after it said it would change the name of its Aunt Jemima brand to eliminate racial stereotypes, PepsiCo's Quaker division unveiled the new name. The syrup and pancake range will adopt the name of its original creator, the Pearl Milling Company, which originally introduced the brand in 1889. Pearl Milling Company doesn't exactly roll off the tongue like Aunt Jemima, but it's the thought that counts.

Adbrands Daily Update 17th Jun 2020: Responding to the re-energised Black Lives Matter movement, PepsiCo and Mars have announced plans to review food products whose branding harks back to America's segregated past. PepsiCo's Quaker Oats division said it would change the packaging of its Aunt Jemima syrup and pancake mix range, acknowledging that the current mascot design was still "based on a racial stereotype". A change of name is also likely before the end of the year. "While work has been done over the years to update the brand in a manner intended to be appropriate and respectful, we realize those changes are not enough," said Quaker CMO Kristin Kroepfl. Mars was quick to follow, promising to evaluate "all possibilities" for its Uncle Ben's rice range. "As we listen to the voices of consumers, especially in the Black community, and to the voices of our Associates worldwide, we recognize that now is the right time to evolve the Uncle Ben's brand, including its visual brand identity," the company said. Colgate-Palmolve, too, said it would "review and evolve" the branding of its Asian toothpaste brand Darlie, known as Darkie until 1989. In China it is still marketed under a name that translates as "black person's toothpaste".

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