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 smart 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 has been forced to combat activist investors calling for the drinks and snacks businesses to demerge as separate companies. Group revenues rose 5% in 2020 to $70.4bn; net income dipped slightly to $7.2bn. 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 pourchases 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 5th March 2020
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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".
Adbrands Daily Update 11th Mar 2020: PepsiCo sealed a deal to acquire energy drinks manufacturer Rockstar Beverages for $3.85bn, a significant addition to its portfolio. It already has a distribution partnership with the smaller brand, which is the US #3 in the energy market after independent Red Bull and Monster. The latter is part-owned and distributed by Coca-Cola. The acquisition of Rockstar will also give PepsiCo greater freedom to market energy-formula variants of other brands in its portfolio including Pepsi and Mountain Dew.
Adbrands Daily Update 25th Feb 2020: "GOAT Camp". TBWA's major new campaign for PepsiCo's Gatorade isn't perhaps the best ad you'll see this week, but it's certainly notable in terms of its scale, all-star cast and extravagant design. Shame then that's it's also more than a little corny in its approach. It strives for the knowing humour we've seen in similar such ads for Nike and Adidas in the past but is it me or are these jokes - Serena's wall-buster, Bolt's signed T-shirts - simply not clever enough? Surely even sporting superstars have the ability to smile at themselves a little. As usual, Messi gives over and above the call of duty in terms of time and effort - most of the others appear to have Skyped in their appearances - and the end results are impressive. But over-earnest and definitely no classic.
Adbrands Daily Update 19th Jul 2019: PepsiCo signed off a deal to acquire one of South Africa's biggest homegrown snacks and drinks companies, Pioneer Foods, for around $1.7bn. Pioneer's portfolio includes the Bokomo breakfast cereal range led by Weet-Bix, juice brands Liqui-Fruit and Ceres, Sasko flour and Safari nuts and fruits snacks, among others. Pioneer also has local ownership of Heinz food brands in South Africa as well as John West canned tuna. It's not clear if these brands will be retained following the PepsiCo buyout.
Adbrands Daily Update 12th Jun 2019: Reckitt Benckiser has raided PepsiCo to find its new CEO. The US drinks and snacks group's current chief commercial officer Laxman Naasimhan will join RB next month as deputy CEO, and will take over the top job from Rakesh Kapoor in September. PepsiCo named Ram Krishnan, also CEO for Greater China, as Narasimhan's successor as new chief commercial officer.
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