PepsiCo Inc. Overview

PepsiCo Inc.

Introduction

PepsiCo Inc., a global leader in the food and beverage industry, manufactures and sells its goods in more than 200 nations. PepsiCo is the manufacturer of flavored snacks, cereals, rice, pasta, dairy-based products, and chips. The beverage portfolio of the company includes bottled water, carbonated soft drinks, juices, ready-to-drink tea and coffee, sports drinks, and other beverages. The headquarters of the company are located in Purchase, New York, and it employs approximately 274,000 people all over the world. PepsiCo owns nine of the forty most valuable packaged goods trademarks in the United States. Twenty-two of the company’s brands, including Gatorade, Pepsi, and Lay’s, each bring in more than $1 billion in revenue.

How PepsiCo Inc. Started

Caleb Bradham, a pharmacist and industrialist from New Bern, North Carolina, developed the soft drink’s recipe in the 1880s. He dubbed it “Pepsi-Cola” in 1898. He started the Pepsi-Cola Company in 1902 and registered a patent for his recipe in 1903 as the cola gained popularity. In 1919, Delaware became the location of the initial incorporation of the Pepsi-Cola Company. In 1931, the company went out of business, and on June 8 of that same year, Charles Guth, who owned a syrup manufacturing company in Baltimore, Maryland, purchased the trademark as well as the recipe for the syrup. In addition, Guth was the president of Loft, Incorporated, a leading candy manufacturer, and he reformulated the syrup with the help of the labs and chemists at the company. He used Loft resources to promote Pepsi, moved the soda company to a New York City location close to Loft’s own facilities, and signed a contract to stock the soda in Loft’s extensive chain of candy shops and restaurants, which were famous for their soda fountains. In the landmark case Guth v. Loft Inc., Loft’s shareholders sued Guth for his 91% stake in Pepsi-Cola Company in 1935. Loft won the case, and on May 29, 1941, Loft formally merged with Pepsi, which was rebranded as Pepsi-Cola Company that same year. At this time, loft restaurants and candy stores were spun off. With the acquisition of Mountain Dew and the creation of Diet Pepsi, the company’s product lines expanded in the early 1960s. In 1965, the Pepsi-Cola Company and Frito-Lay, Inc. merged to form PepsiCo, Inc., the name it now goes by. PepsiCo was founded in Delaware and had its headquarters in Manhattan, New York, when it was founded. In 1970, the headquarters of the company were moved to Purchase, New York, where they are still located. In 1986, PepsiCo was reincorporated in North Carolina.

PepsiCo Inc. Acquisitions

Pepsi has built a substantial portfolio of well-known brands through acquisitions for more than 50 years. The snack-food delivery company founded by Herman W. Lay and the manufacturer of Fritos corn chips merged in 1961 to form Frito-Lay. PepsiCo was created when the business merged with Pepsi-Cola four years later. Pepsi would become more than just a beverage company from that point on. Pepsi bought the Quaker Oats company. The acquisition added Pearl Milling Co. (formerly Aunt Jemima) mixes and syrups, Cap’n Crunch and Life cereals, Pasta Roni, Quaker grits, and other food brands to Pepsi’s portfolio. Gatorade, a well-liked sports drink, was added to PepsiCo’s beverage portfolio by Quaker Oats. Pepsi made its largest acquisition to date when it purchased the Tropicana juice business from the Seagram Company in 1998. Pepsi would now be competing with rival Coca-Cola, which owns Minute Maid, in the orange juice market as a result of the acquisition. Sabra and Pepsi entered into a 50/50 partnership agreement in 2008. The two businesses agreed to create, produce, and sell refrigerated dips and spreads in the United States and Canada as part of the partnership. The naked juice company was purchased by Pepsi in 2007 for an undisclosed sum. Pepsi’s portfolio of beverage brands is bolstered by the acquisition, which includes a line of healthy juice and juice smoothie drinks for health-conscious consumers.

PepsiCo Inc. Competitors

Coca-Cola

It is generally agreed that Coca-Cola is PepsiCo’s primary rival.Despite its exclusive focus on beverages, Coca-Cola has a slightly less diverse product portfolio than Pepsi, despite its superior brand equity and recognition worldwide. However, in some markets, Coca-Cola beverages sell more than Pepsi alternatives.In addition, the business owns more than 500 beverage brands in a variety of categories, such as coffee, sports drinks, water, juices, and soft drinks. In North America, where Coca-Cola generates nearly 35% of its total net operating revenue, competition is particularly fierce. Since nearly 33% of PepsiCo’s total revenue comes from sales of beverages in North America alone, it is critical for the company to maintain its market share in the United States.

Kellogg’s

In the breakfast food market, Kellogg’s and Quaker Foods Company, which is owned by PepsiCo, are competitors. Kellogg’s makes cookies, crackers, protein bars, frozen waffles, fruit-flavored snacks, and traditional cereals. When Kellogg’s bought Procter & Gamble’s Pringles brand for $2.7 billion in 2012, it became the second-largest snack food company in the world after PepsiCo.

Keurig Dr Pepper

The American beverage and beverage-making conglomerate Keurig Dr. Pepper sells sodas, juices, and other beverages. Keurig Dr Pepper, like Coca-Cola, has a significant presence in North America. 21.1% of the global market was held by the United States in 2020. More than 125 owned, licensed, partnered, and allied brands make up the portfolio of the business. Dr. Pepper, Sunkist, Schweppes, Green Mountain Coffee Roasters, Snapple, Vita Coco, Clamato, and Swiss Miss are among these.

PepsiCo Inc. Controversies & Environmental Record

Pepsico vs Farmers

When the multinational corporation PepsiCo was in the news for suing some farmers in Gujarat, India, for cultivating a potato variety that the multinational claimed was its own, a huge controversy caught everyone’s attention. Politicians, farmers, and activists all had strong reactions to the controversy. Farmers threatened a boycott as a result of this, which sparked widespread opposition. Pepsico was then  “convinced” to drop all of the lawsuits. The Protection of Plant Varieties and Farmers Rights’ Authority (PPV&FRA) revoked PepsiCo India’s registration two years later.

Packaging & Recycling

As bottle recycling rates for the company’s products in 2009 averaged 34% within the U.S., environmental advocates have expressed concern regarding the environmental impacts of the disposal of PepsiCo’s bottled beverages in particular. In 2019, BreakFreeFromPlastic named PepsiCo one of the top 10 global plastic polluters for the second year in a row. The company has taken steps to reduce these negative effects on the environment by developing new packaging and implementing recycling programs. PepsiCo stated in 2010 that it aimed to establish partnerships that would result in a 50 percent recycling rate for beverage containers in the United States by 2018.

PepsiCo Inc. Key Financials

• PepsiCo’s 2021 annual revenue was $79.474 billion, an increase of 12.93 percent from 2020. The twelve months ending September 30, 2022 saw an increase of 9.08 percent in revenue for PepsiCo, reaching $83.644 billion.
• Operating income for PepsiCo in 2021 was $11.162 billion, a 10.73 percent increase from 2020. PepsiCo’s operating income increased by 16.04 percent year-over-year to $13.259 billion for the year that ended September 30, 2022.
• Net income for PepsiCo in 2021 was $7.618 billion, an increase of 6.99% from 2020. The twelve months ending September 30, 2022 saw a 19.32 percent increase in PepsiCo’s net income to $9.714 billion.
• In 2021, PepsiCo’s total assets were $92.377 billion, a 0.58 percent decrease from 2020. For the quarter that ended on September 30, 2022, PepsiCo’s total assets were $94.461B, an increase of 1.29 percent year-over-year.
• PepsiCo employed approximately 309,000 people worldwide as of December 25, 2021.