Pepsico

Marketing Of PepsiCo
I - Introduction
PepsiCo Inc. is an American multinational food and beverage corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grainbased snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001which added the Gatorade brand to its portfolio. As of January 2012, 22 of PepsiCo's product lines generated retail sales of more than $1 billion each, and the company's products were distributed across more than 200 countries, resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second largest food & beverage business in the world. Within North America, PepsiCo is ranked (by net revenue) as the largest food and beverage business. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the company employed approximately 297,000 people worldwide as of 2011. The company's beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions. PepsiCo is a SIC 2080(beverage) company. PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. Their main businesses Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola make hundreds of enjoyable foods and beverages that are loved throughout the world. PepsiCos people are united by theirunique commitment to sustainable growth by investing in a healthier future for people and their planet, which believe also means a more successful future for PepsiCo. Pepsico call this commitment Performance with Purpose: PepsiCos promise to provide a wide range of foods and beverages from treats to healthy eats; to find innovative ways to minimize their impact on the environment by conserving energy and water and reducing packaging volume; to provide a great workplace for their associates; and to respect, support and invest in the local communities where they operate.
I.i. - PepsiCo India Region: Leadership

through Performance with Purpose
PepsiCo entered India in 1989 and in a short period, has grown into one of the largest and fastest growing food and beverage businesses in the country. PepsiCo Indias growth has been guided by PepsiCos global vision of Performance with Purpose. One of the largest food and beverage businesses in India: PepsiCo Indias diverse portfolio includes iconic brands like Pepsi, Lays, Kurkure, Tropicana 100%, Gatorade and Quaker. PepsiCo India has not only grown to become one of the countrys largest food and beverage businesses but has also become a powerful and consistent driver of PepsiCos global growth. Within 2 decades, the company has been able to organically grow eight INR 1000 crore plus brands in India, which are household names trusted across the country. Model partnership with over 24,000 farmers: PepsiCo has pioneered and established a model of partnership with farmers and now works with over 24,000 happy farmers across nine states. More than 45 percent of these are small and marginal farmers with a land holding of one acre or less. PepsiCo provides 360-degree support to the farmer through assured buy back of their produce at pre-agreed prices, quality seeds, extension services, disease control packages, bank loans, weather insurance, and the latest technological practices. Global leader in water conservation: In 2009, PepsiCo India achieved a significant milestone, by becoming the first business to achieve Positive Water Balance in the beverage world, a fact verified by Deloitte Touch Tohmatsu India Pvt. Ltd and has been Water Positive since then. The company made this possible through innovative irrigation practices like direct seeding, water recharging, and by reducing the consumption of water in its manufacturing facilities. PepsiCo is lauded for its efforts for water conservation. Care for the environment: PepsiCo is focused on reducing its carbon footprint. Nearly 30 percent of its energy is today generated from renewable sources such as rice husk boilers and wind turbines. Initiatives such as reduction of use of chemicals, eco-friendly packaging initiatives and efficient waste management help reduce load on the environment. PepsiCo Indias award-winning Waste to Wealth recycling program reaches 465,000 families. Exemplary employment practices: PepsiCo India presently employs 6,400 people and provides indirect employment to almost 2,00,000 people. The company believes in providing employment and growth opportunities to local talent. Its College of Leadership, ensures early identification of talent, and employees focused development through critical experiences. The company emphasizes Winning with Diversity and Inclusion and has a significant number of women in the leadership team in India. PepsiCo India has won the prestigious Hellen Keller Award from the National Centre for Promotion of Employment for Disabled People (NCPEDP).
I.ii. - History
Origins:-
The recipe for Pepsi (the soft drink), was first developed in the 1880s by a pharmacist and industrialist from New Bern, North Carolina, named Caleb Bradham who called it "Pepsi-Cola" in 1898. As the cola developed in popularity, he created thePepsi-Cola Company in 1902 and registered a patent for his recipe in 1903. The Pepsi-Cola Company was first incorporated in the state of Delaware in 1919. The company went bankrupt in 1931
and on June 8 of that year, the trademark and syrup recipe was bought by Charles Guth who owned a syrup manufacturing business in Baltimore, Maryland. Guth was also the president of Loft, Incorporated, a leading candy manufacturer, and he used the company's labs and chemists to reformulate the syrup. He further contracted to stock the soda in Loft's large chain of candy shops and restaurants, which were known for their soda fountains, used Loft resources to promote Pepsi, and moved the soda company to a location close by Loft's own facilities in New York City. In 1935, the shareholders of Loft sued Guth for his 91% stake of Pepsi-Cola Company in the landmark Guth v. Loft Inc.. Loft won the suit and on May 29, 1941 formally absorbed Pepsi into Loft, which was then rebranded as Pepsi Cola Company that same year. (Loft restaurants and candy stores were spun off at this time.) In the early 1960s, the company product line expanded with the creation of Diet Pepsi and purchase of Mountain Dew. In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the company it is known as at present. At the time of its foundation, PepsiCo was incorporated in the state of Delaware and headquartered in Manhattan, New York. The company's headquarters were relocated to its still-current location of Purchase, New York in 1970, and in 1986 PepsiCo was reincorporated in the state of North Carolina.
Acquisitions and divestments:Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses outside of its core focus of packaged food and beverage brands; however it exited these non-core business lines largely in 1997, selling some, and spinning off others into a
new company named Tricon Global Restaurants, which later became known as Yum! Brands, Inc.. PepsiCo also previously owned several other brands that it later sold so it could focus on its primary snack food and beverage lines, according to investment analysts reporting on the divestments in 1997. Brands formerly owned by PepsiCo include: Pizza Hut, Taco Bell, KFC, Hot 'n Now, East Side Mario's, D'Angelo Sandwich Shops, Chevys Fresh Mex, California Pizza Kitchen, Stolichnaya (via licensed agreement), Wilson Sporting Goods and North American Van Lines. The divestments concluding in 1997 were followed by multiple large-scale acquisitions, as PepsiCo began to extend its operations beyond soft drinks and snack foods into other lines of foods and beverages. PepsiCo purchased the orange juicecompany Tropicana Products in 1998, and merged with Quaker Oats Company in 2001, adding with it the Gatoradesports drink line and other Quaker Oats brands such as Chewy Granola Bars and Aunt Jemima, among others. In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this acquisition was completed, resulting in the formation of a new wholly owned subsidiary of PepsiCo, Pepsi Beverages Company. In February 2011, the company made its largest international acquisition by purchasing a two-thirds (majority) stake in Wimm-Bill-Dann Foods, a Russian food company that produces milk, yogurt, fruit juices, and dairy products. When it acquired the remaining 23% stake of Wimm-Bill-Dann Foods in October 2011, PepsiCo became the largest food and beverage company in Russia.
Restructuring:In February 2012 ahead, CEO of PepsiCo Inc. plans to cut 8,700 jobs or about 3 percent of the PepsiCo's global workforce and boost marketing spending for its brand by as much as $600 million. It may save about $1.5 billion by 2014.
Competition:The Coca-Cola Company has historically been considered PepsiCo's primary competitor in the beverage market, and in December 2005, PepsiCo surpassed The Coca-Cola Company in market value for the first time in 112 years since both companies began to
compete. In 2009, the Coca-Cola Company held a higher market share in carbonated soft drink sales within the U.S. In the same year, PepsiCo maintained a higher share of the U.S. refreshment beverage market, however, reflecting the differences in product lines between the two companies. As a result of mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its business has shifted to include a broader product base, including foods, snacks and beverages. The majority of PepsiCo's revenues no longer come from the production and sale of carbonated soft drinks. Beverages accounted for less than 50 percent of its total revenue in 2009. In the same year, slightly more than 60 percent of PepsiCo's beverage sales came from its primary non-carbonated brands, namely Gatorade and Tropicana. PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack food market, accounting for approximately 39 percent of U.S. snack food sales in 2009.[28] One of PepsiCo's primary competitors in the snack food market overall is Kraft Foods, which in the same year held 11 percent of the U.S. snack market share.
I.iii. - Area Of Business

The structure of PepsiCo's global operations has shifted multiple times in its history as a result of international expansion, and as of 2010 it is separated into four main
divisions: PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of the company's net revenues came from North and South America, 16 percent from Europe and 13 percent from Asia, the Middle East and Africa. Approximately 285,000 people are employed by PepsiCo worldwide as of 2010.
PepsiCo Americas Foods

PepsiCo Americas Foods consists of the company's food and snack operations in North and South America. This operating division is further segmented into Frito-Lay North America, Quaker Foods & Snacks, Sabritas, Gamesa, and Latin America Foods. Food and snack sales in North and South America combined contributed 48 percent of PepsiCo's net revenue in 2009. Frito-Lay North America, the result of a merger in 1961 between the Frito Company and the H.W. Lay Company, produces the top selling line of snack foods in the U.S. Its main brands in the U.S., Canada and Mexico and include Lay's and Rufflespotato chips, Doritos tortilla chips, Tostitos tortilla chips and dips, Cheetos cheese flavored snacks, Fritos corn chips, Rold Gold pretzels, Sun Chips and Cracker Jack popcorn. Products made by this division are sold to independent distributors and retailers, and are transported from Frito-Lay's manufacturing plants to distribution centers, principally in vehicles owned and operated by the company. Quaker Foods North America, created following PepsiCo's acquisition of the Quaker Oats Company in 2001, manufactures, markets and sells Quaker Oatmeal, Rice-ARoni, Cap'n Crunch and Life cereals, as well as Near East side dishes within North America. This division also owns and produces the Aunt Jemima brand, which as of 2009 was the top selling line of syrups and pancake mixes within this region. Sabritas and Gamesa are two of PepsiCo's food and snack business lines headquartered in Mexico, and they were acquired by PepsiCo in 1966 and 1990, respectively. Sabritas markets Frito-Lay products in Mexico, including local brands such as Poffets, Rancheritos, Crujitos and Sabritones. Gamesa is the largest manufacturer of cookies in Mexico, distributing brands such as Emperador, Arcoiris and Maras Gamesa. PepsiCo's Latin America Foods (Spanish: Snacks Amrica Latina) operations market and sell primarily Quaker- and Frito-Lay-branded snack foods within Central and South America, including Argentina, Brazil, Peru and other countries in this region. Snacks Amrica Latina purchased Peruvian company Karinto S.A.C. including its production company Bocaditas Nacionales (with three production facilities in Peru) from the Hayashida family of Lima in 2009, adding the Karito brand to its product line, including Cuates, Fripapas, and Papi Frits.
PepsiCo Americas Beverages

This division contributed 23 percent of PepsiCo's net revenue as of 2009, and involves the manufacture (and in some cases licensing), marketing and sales of both carbonated and non-carbonated beverages in North, Central and South America. The main
brands distributed under this division include Pepsi, Mountain Dew, Gatorade, 7 Up (outside the U.S.),Tropicana Pure Premium orange juice, Sierra Mist, SoBe Lifewater, Tropicana juice drinks, AMP Energy, Naked Juice andIzze. Aquafina, the company's bottled water brand, is also marketed and licensed through PepsiCo Americas Beverages. PepsiCo also has formed partnerships with several beverage brands it does not own, in order to distribute or market them with its own brands. As of 2010, its partnerships include: Starbucks (Frappuccino, DoubleShot and Iced Coffee), Unilever'sLipton brand (Lipton Brisk and Lipton Iced Tea), and Dole (licensed juices and drinks). The company started a new market strategy to sell their Pepsi Cola product in Mexico, stating that about one third of the population has difficulty pronouncing "Pepsi". They started manufacturing and selling their product under the label 'Pcsi', the advertisement campaign features the Mexican soccer celebrity Cuauhtmoc Blanco. This is not the first time it has happened, back in 2009, PepsiCo used the same strategy successfully in Argentina.
PepsiCo Europe
PepsiCo began to expand its distribution in Europe in the 1980s, and in 2009 it made up 16 percent of the company's global net revenue. Unlike PepsiCo's Americas business segments, both foods and beverages are manufactured and marketed under one umbrella division in this region, known as PepsiCo Europe. The primary brands sold by PepsiCo in Europe include Pepsi-Cola beverages, Frito-Lay snacks, Tropicana juices and Quaker food products, as well as regional brands unique to Europe such as Walkers crisps, Copella, Paw Ridge, Snack-a-Jack, Duyvis and others. PepsiCo also distributes the soft drink 7UP in Europe via license agreement. PepsiCo's European presence expanded in Russia in 2009 as the company announced a $1B investment, and with its acquisition of Russian juice and dairy product brand WimmBill-Dann Foods in December 2010 and Lebedyansky juice producer in March 2008.
PepsiCo Asia, Middle East & Africa

The most recently created operating division of PepsiCo covers Asia, the Middle East and Africa. In addition to the production and sales of several worldwide Pepsi-Cola, Quaker Foods and Frito-Lay beverage and food product lines (including Pepsi and Doritos), this segment of PepsiCo's business markets regional brands such as Mirinda, Kurkure and Red Rock Deli, among others. While PepsiCo owns its own manufacturing and distribution facilities in certain parts of these regions, more of this production is conducted via alternate means such as licensing (which it does with Aquafina), contract manufacturing, joint ventures and affiliate operations. PepsiCo's businesses in these regions, as of 2009, contributed 13 percent to the company's net revenue worldwide. In August 2012, PepsiCo signed an agreement with a local Myanmar distributor to sell its softdrinks after a 15-year break to reenter the country.
I.iv. Corporate Governance
Headquartered in Purchase, New York, with research and development headquarters in Valhalla, New York, PepsiCo's Chairman and CEO is Indra Nooyi. The board of directors is composed of eleven outside directors as of 2010, includingRay Lee Hunt, Shona Brown, Victor Dzau, Arthur C. Martinez, Sharon Percy Rockefeller, Daniel Vasella, Dina Dublon, Ian M. Cook, Alberto Ibargen, James J. Schiro and Lloyd G. Trotter. Former top executives at PepsiCo include Steven Reinemund,Roger Enrico, D. Wayne Calloway, John Sculley, Michael H. Jordan, Donald M. Kendall, Christopher A. Sinclair and Alfred Steele. On October 1, 2006, former Chief Financial Officer and President Indra Nooyi replaced Steve Reinemund as Chief Executive Officer. Nooyi remained as the corporation's president, and became Chairman of the Board in May 2007, later (in 2010) being named No.1 on Fortune's list of the "50 Most Powerful Women" and No.6 on Forbes' list of the "World's 100 Most Powerful Women". PepsiCo received a 100 percent rating on the Corporate Equality Index released by the LGBT-advocate groupHuman Rights Campaign starting in 2004, the third year of the report.
Headquarters:The PepsiCo headquarters are located in Purchase, New York. It was one of the last architectural works by Edward Durell Stone. It consists of seven three story buildings. Each building is connected to its neighbor through a corner. The property includes the Donald M. Kendall Sculpture Gardens with 45 contemporary sculptures open to the public. Works include those of Alexander Calder, Henry Moore, and Auguste Rodin. Westchester Magazine stated "The buildings square blocks rise from the ground into low, inverted ziggurats, with each of the three floors having strips of dark windows; patterned pre-cast concrete panels add texture to the exterior surfaces." In 2010 the magazine ranked the building as one of the ten most beautiful buildings in Westchester County. At one time PepsiCo had its headquarters in 500 Park Avenue in Midtown Manhattan, New York City. In 1956 Pepsico paid $2 million for the original building. PepsiCo built the new 500 Park Avenue in 1960. In 1966, Mayor of New York City John Lindsay started a private campaign to convince PepsiCo to remain in New York City. Six months later, the company announced that it was moving to 112 acres (45 ha) of the Blind Brook Polo Club in Westchester County. After PepsiCo left the Manhattan building, it became known as the Olivetti Building.
I.v. - Mission and Vision

At PepsiCo, being a responsible corporate citizen is not only the right thing to do, but the right thing to do for their business.
Mission
Pepsi mission is to be the world's premier consumer products company focused on convenient foods and beverages. They seek to produce financial rewards to investors even as pepsi provide opportunities for growth and enrichment to their employees, their business partners and the communities in which they operate. And in everything they do, they strive for honesty, fairness and integrity.
Vision
PepsiCo's responsibility is to continually improve all aspects of the world in which operate environmental, social, economic creating a better tomorrow than today. Pepsi vision is put into action through programmes and a focus on environmental stewardship, activities to benefit society and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
Performance with Purpose

At PepsiCo, they're committed to achieving business and financial success while leaving a positive imprint on society delivering what they call Performance with Purpose. Their approach to superior financial performance is straightforward drive shareholder value. By addressing social and environmental issues, they also deliver on their purpose agenda, which consists of human, environmental, and talent sustainability.
10
I.vi. - PepsiCo Values & Philosophy

Pepsico values and philosophy are a reflection of the socially and environmentally responsible company aspire to be. They are the foundation for every business decision made.
Commitment
They are committed to delivering sustained growth through empowered people acting responsibly and building trust.
What it Means?
Sustained Growth is fundamental to motivating and measuring their success. Pepsico quest for sustained growth stimulates innovation, places a value on results and helps us understand whether today's actions will contribute to their future. It is about the growth of people and company performance. It prioritizes both making a difference and getting things done. Empowered People means have the freedom to act and think in ways that they feel will get the job done, while adhering to processes that ensure proper governance and being mindful of company needs beyond their own. Responsibility and Trust form the foundation for healthy growth. They hold o both personally and corporately accountable for everything they do. Pepsico earn the confidence others place in us as individuals and as a company. By acting as good stewards of the resources entrusted to us, strengthen that trust by delivering on their promises and remaining committed to succeeding together.
11
Guiding Principles
PEPSICO Uphold their commitment with six guiding principles. Must always strive to: 1. Care for customers, consumers and the world we live in. Pepsico are driven by the competitive spirit of the marketplace, but direct this spirit toward solutions that benefit both company and constituents. Success depends on a thorough understanding of customers, consumers and communities. To foster this spirit of generosity, pepsico go the extra mile to show we care. 2. Sell only products which they can be proud of. The true test of standards is that pepsico are able, without reservation, to consume and personally endorse the products they sell. Absolute endorsement extends to every part of the business, from the purchase of ingredients to the point where products reach consumers. 3. Speak with truth and candour. They tell the whole story, not just what is convenient to individual goals. In addition to being clear, honest and accurate, take responsibility for ensuring that communications are understood. 4. Balance the short term and long term. In every decision, weigh both short-term and long-term risks and benefits. Maintaining this balance helps sustain growth and ensures that ideas and solutions are relevant both now and in the future. 5. Win with diversity and inclusion. Embrace people with diverse backgrounds, traits and ways of thinking. Diversity brings new perspectives into the workplace and encourages innovation, helps identify new market opportunities, develop new products and sustain commitment to growth through empowered people. 6. Respect others and succeed together. Pepsico depend on people who can work together, whether in structured teams or through informal collaboration. Mutual success depends on mutual respect, for both those within and outside the company. While company is built on individual excellence, the value attach to teamwork and mutual respect turns goals into accomplishments.
12
I.vii. - Global Code of Conduct

At PepsiCo, they believe acting ethically and responsibly is not only the right thing to do, but also the right thing to do for business. PepsiCo Global Code of Conduct ( Code) has been revised effective October 1, 2012 to address changing laws that impact their business. It is designed to provide employees with specific guidance on how to act ethically while performing work for PepsiCo. All PepsiCo employees are expected to embrace the principles of their Code and:

Show respect in the workplace Act with integrity in the marketplace Ensure ethics in their business activities Perform work responsibly for their shareholder Code remains roadmap and compass for doing business the right way. It reinforces core Values and is the foundation of their strategic mission of Performance with Purpose in fact, Code is the purpose behind their performance. Speak Up reporting hotline is an integral part of their culture of ethics and compliance at PepsiCo. Encourage all employees, vendors, contractors and customers to speak up about business situations that might conflict with the Code, their Values, their policies and applicable law.
Speak Up
At PepsiCo, their Speak Up hotline provides associates, as well as consumers, business partners and others with a means to report potential violations of the PepsiCo Code of Conduct, their policies or of applicable law.
Speak
Up!
Inaccuracy of financial records Bribery, corruption or illegal payments Safety and environmental hazards Product quality issues Theft or fraud
If you see or hear something you believe is illegal or a violation of their Code.
Speak Up!
Accounting and auditing irregularities Criminal conduct and violations of law Discrimination and harassment Conflicts of interest Workplace violence
13
II - PURPOSE
II.i. - Performance with Purpose
At PepsiCo, 'Performance with Purpose' means delivering sustainable growth by investing in a healthier future for people and their planet. As a global food and beverage company with brands that stand for quality and are respected household names Pepsi, Frito-Lay, Quaker Oats, Tropicana and Gatorade to name a few they will continue to build a portfolio of enjoyable and wholesome foods and beverages; find innovative ways to reduce the use of energy, water and packaging; and provide a great workplace for their employees. Additionally, pepsico will respect, support and invest in the local communities where they operate by hiring local people, creating products designed for local tastes and partnering with local farmers, governments and community groups. Because a healthier future for all people and their planet means a more successful future for PepsiCo. This is their promise.
Performance:To all of their investors, it's a promise to strive to deliver superior, sustainable financial performance.
Human Sustainability:To the people of the world, it is a promise to encourage people to live healthier lives by offering a portfolio of both enjoyable and wholesome foods and beverages.
Environmental Sustainability:To the planet pepsico all share, it is a promise to be a good citizen of the world, protecting the Earth's natural resources through innovation and more efficient use of land, energy, water and packaging in their operations.
Talent Sustainability:To the employees of PepsiCo, it is a promise to invest in them to help them succeed, to work continually to develop and retain exceptional people and to create employment opportunities in the communities they serve.
14
II.ii. - Human Sustainability

It's a promise to encourage people to live healthier by offering a portfolio of both enjoyable and wholesome foods and beverages.
Global goals include:

Increasing the whole grains, fruits and vegetables, nuts, seeds and low-fat dairy in its product portfolio. Reducing the average sodium per serving in key global food brands in key markets by 25 percent by 2015. Reducing the average saturated fat per serving in key global food brands in key markets by 15 percent by 2020. Reducing the average added sugar per serving in key global beverage brands in key markets by 25 percent by 2020. PepsiCo India has been at the forefront of leading the human sustainability agenda and some of the initiatives include: The decision to eliminate the direct sale of full-sugar soft drinks to primary and secondary schools around the globe. Frito Lay's products are MSG and trans-fat free and contain voluntary on pack nutritional labeling. Breakfast cereal, Quaker Oats, is rich in soluble fibre, beta-glucan which helps in lowering cholesterol. The new Lay's Classic Salted has been launched with 25 percent less sodium. Lehar Gluco+ is a lemon-flavored drink with glucose, electrolytes and iron that provides instant energy and refreshment to consumers. Tropicana 100% juice range provides fruit nutrients PepsiCo offers products with zero or reduced calories such as Diet Pepsi, and Aquafina packaged water and bulk water. Gatorade, the world's leading sports drink, has valuable re-hydration benefits and is scientifically formulated to replenish electrolytes, and refuel carbohydrate energy. Most of PepsiCo's products are available in a range of packages so consumers can choose a size suited to particular consumption occasion, and offering choices for portion control. Lehar Iron Chusti is an extruded snack fortified with best form of iron (NaEDTA) to address pervasive problem of Iron Deficiency Anaemia for base of pyramid population at an affordable price. Nutritionally a single pack delivers 25 percent of iron RDA and 50 percent of Vitamin B1, B12 and folate RDA for adolescent girls. The product has been specifically designed for adolescent girls recognizing the impact of micronutrient deficiency in context of intergenerational cycle of malnutrition. The product is made with wholesome local grains like ragi, soya and rice. Aquafina packaged water for safe hydration
15
II.ii. - Environmental Sustainability

To the planet they all share It is a promise to be a good citizen of the world, protecting the Earth's natural resources through innovation and more efficient use of land, energy, water and packaging in their operations. Business focuses on sustainable growth and relies on the Earth's natural resources every day. As their business grows in developed, developing and emerging countries, remain committed to minimizing the impact it has on the environment. Pepsico strive to use only methods and tools that are scientifically proven, socially responsible and economically sound. In India, Pepsico operate three ongoing initiatives to better the environment. These are closely linked to their business and are areas in which Pepsico believe they can make a very positive impact. Initiative to replenish water has been a major success. 2009 was a milestone for us Pepsico were able to achieve a positive water balance, giving back more water than they consumed through their various initiatives of recharging, replenishing and reusing water. Efforts to convert waste to wealth have been very fruitful. Pepsico have educated community members on how to segregate and recycle their waste. In a project employing over 500 people, transform bio-degradable waste into organic manure through vermi-culture. They have also partnered with farmers across the country to help them boost their productivity and income. Pepsico have pioneered contract farming, developed robust, highquality potato seeds, arranged for farmer loans, and aided citrus growers in a variety of ways.
16
Goals and Commitments

In 2009, Pepsico announced 15 global goals and commitments to guide work to protect the Earth's natural resources through innovation and more efficient use of land, energy, water and packaging in their operations. Pepsico are focusing work where can make the most positive impact (water, packaging, climate change and agriculture) and on key policies and partnerships to help provide solutions to address the world's environmental challenges.
Water: Respect the human right to water through world-class efficiency in their operations, preserving water resources and enabling access to safe water

Improve water use efficiency by 20 percent per unit of production by 2015. Strive for positive water balance in their operations in water-distressed areas. Provide access to safe water to 3 million people in developing countries by the end of 2015.
Land and Packaging: Rethink the way they grow, source, create, package and deliver their products to minimize their impact on land
Continue to lead the industry by incorporating at least 10 percent recycled polyethylene terephthalate (rPET) in their primary soft drink containers in the US, and broadly expand the use of rPET across key international markets. Reduce packaging weight by 350 million pounds, avoiding the creation of 1 billion pounds of landfill waste by 2012. Work to eliminate all solid waste to landfills from their production facilities.
Climate Change: Reduce the carbon footprint of their operations

Improved their electricity use efficiency by 20 percent per unit of production by 2015. Reduced their fuel use intensity by 25 percent per unit of production by 2015. Commit to an absolute reduction in GHG emissions across global operations.
Community: Respect and responsibly use natural resources in their businesses and in the local communities Pepsico serve

Apply proven sustainable agricultural practices on their farmed land. Provide funding, technical support and training to local farmers. Promote environmental education and best practices among their associates and business partners. Integrate their policies and actions on human health, agriculture and the environment to make sure they support each other.
17
III - Board Of Directors
Shown in photo, left to right:
IV - BRANDS
Pepsico goal is to nourish consumers with a range of products that deliver great taste, convenience and affordability, from simple treats to healthy offerings.
18
Foods
PepsiCos foods division Frito-Lay is the leader in the branded salty snack market. All its products are free of trans-fat and MSG. It manufactures Lays potato chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The companys high-fibre breakfast cereal, Quaker Oats and low-fat and roasted snack options like Aliva increase the number of healthy choices available to consumers.

Aliva Cheetos Kurkure Lays Lehar Namkeen Quaker Oats Uncle Chipps
Beverages
PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7UP, Nimbooz, Mirinda, Slice and Mountain Dew, in addition to lowcalorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinkGatorade and fruit juices such as Tropicana and Tropicana 100%.

7UP Aquafina Duke's Gatorade Mirinda Mountain Dew Nimbooz Pepsi Slice Tropicana
i.
7up
Brand History
19
7UP, the refreshing clear drink with a natural lemon and lime flavour was created in 1929. 7UP was launched in India in 1990 and its international mascot Fido Dido was used for advertising in 1992 to position the brand as a cool drink for youngsters. Fido became an instant hit with his trendy look, laid-back attitude and unconventional take on life. During the brands early years in India, 7UP gained market leader status in the lemon lime category by being one of the first to be nationally distributed besides being marketed as a healthier alternative to other soft drinks. Brand Advantage For the past two years, 7UPs ambition as a brand has been to capture and own the lemon refreshment territory within the clear lime category. Lemon has proven to be a clear and relevant differentiator for the brand. Further, the emotional connect with the idea of upliftment through refreshment has led to an impressive payoff for the brand. After establishing itself as The Lemon Drink in January 2009, 7UP has continued to build on the theme of mood upliftment with its new tagline Mood Ko Do Lemon Ka Lift. Did You Know? There are many theories for the origin of the 7UP name. According to Professor Gary Yu (UCSB) and researchers for the popular Uncle Johns Bathroom Reader the name is derived from the atomic mass of Lithium, 7, which was originally one of the key ingredients of the drink (lithium citrate). However, there are numerous other myths explaining the name:

Its creator named the soft drink after winning at a casino with three rolls of 7 and the letter U. The drink was formulated with seven flavours plus the bubbles from the drinks carbonation (the bubbles go up). The original bottle contained seven ounces; its creator came up with the name while playing dice. 7UP was the seventh large commercial lemonade brand that tasted the same. Before the formula changed in 2006, a can of 7UP included seven ingredients. The Up in the drinks name might refer to the original inclusion of lithium citrate, when it was marketed as a patent medicine to cure hangovers. The name 7UP was a reference to the Esoteric concept of the Seven Planes, made famous by the Internet series The Arrivals. The name came from the seventh-inning stretch 7UP in baseball tradition. Quick Brand Facts 7UP was created in 1929 7UP was launched in India in 1990
ii.
Aquafina
Brand History
20
Aquafina was first launched in the US in 1994. With its unique purification system and great taste, Aquafina soon became the bestselling brand in the country. In India, Aquafinas journey began with its launch in Bombay in 1999 and it was rolled out nationally by 2000. On the strength of its brand appeal and distribution, Aquafina has become one of Indias leading brands of bottled water in a relatively short span of time.
Brand Advantage

Aquafina goes through a five step state-of-the-art purification process to give consumers pure water and perfect taste. Aquafina has been built through refreshing and sharp advertising. The What a Body campaign has helped the brand to drive premium, modern and youthful imagery in an otherwise undifferentiated category. Bottled across India in 19 plants, Aquafina is available across more than half a million outlets. Catering to diverse consumer needs and occasions, it is available in various pack sizes like 300ml, 500ml, 1 ltr and 2 ltr bottles and in bulk water jars of 25 ltrs. Aquafina is the face of PepsiCos water conservation initiatives and builds awareness about Pepsicos efforts to replenish and restore the water table through its pack labels.
iii. Cheetos
History
Cheetos, a global brand, launched in India in 1995 has been positioned as a brand which inspires imagination and a sense of adventure and fun.
21
Chester- The Cheetos Mascot

Chester Cheetah is Cheetos brand mascot. Chester Cheetah is the Cool Cat who accompanies kids in their adventures. Chester is wild and witty, wears cool sun glasses and is great fun to be with. Most importantly, Chester Cheetah is crazy for Cheetos.
The Cheetos portfolio

The Cheetos portfolio comprises of a range of exciting shapes and flavours in the extruded segment. The portfolio comprises of Cheetos Masala Balls, Tangy loops, Cheese balls and Cheez Puffs.
Quality Standards
Cheetos is made using the best quality of raw materials, spices and flavors. All the raw materials used for making your favorite snack are subjected to strict quality control at the reception before using in the product. Strict vendor audits are conducted to ensure best quality at source. The plants where some of your favourite Cheetos variants are manufactured are also audited and certified by various external agencies. These certifications include HACCP and certification by TQCSI(Australia), which confirms that the products are manufactured in Food Safety Environment and the manufacturing process has adequate controls to track products. Strict hygiene and sanitation standards are followed for the equipments, processes and facility used for manufacturing of Cheetos.American Institute of Baking (USA), one of the best auditing bodies for confirming process and product safety. The great looking packs of Cheetos are packed under unique hygiene conditions. A complete facility of bulk storage, transfers, packing and clearances are under surveillance for infestation as per PepsiCo India standards. Plants are ISO 14000 certified, which confirms that the manufacturing process ensures environmental safety.
iv. Duke's
Dukes Legacy
Founded in 1889 by Dinshwaji Pandole, Dukes is a brand that is seeped in
Marketing Of PepsiCo Mumbais rich history. It was in many ways the countrys first aerated soft drink and a pioneer on many fronts. Many a generations have grown up enjoying the refreshing taste of Dukes. Thus when PepsiCo India brought this brand in 1994, it also inherited Dukes rich Mumbai legacy. While the Lemonadeflavour has refreshed the consumers ever since, in September 2011 some more flavours of Dukes , the delicious Raspberry and the sugary sweet Ice-cream soda were relaunched. And with it was launched Dukes Masala Soda, with its strong local flavour that has the consumers wanting for more.
22
Dukes Refreshing Mumbai!!

Just a year into its re-launch Dukes is being loved by all Mumbaikars. While the old drink is for nostalgia, the young are attracted to the unique flavours that Dukes offers. Be it morning, after meal or in the evening breeze Dukes flavours refresh you every time. As Dukes consumers say Dukes is an Anytime Drink!!! The sweet Raspberry loved by the Parsi community in Mumbai is getting many new connoisseurs. The Mumbai Masala Soda appeals to all with a very unique Indian taste. Whats more the new party mixers launched under the Dukes name have taken the young in city by storm. No party is complete without the Classic Mojito or the Exotic Blue Lagoon!!!
Brand Facts

Founded in 1889 by Dinshwaji Pandole a Parsi gentleman Bought by PepsiCo in 1994 Relaunched in 2011
v. Gatorade
Brand History
Gatorade, the Worlds No.1 Sports Drink, was born on the field of sport! Gatorade was launched in India in 2004 and over the years, has become an integral part of the kitbags of many leading sportspersons. Gatorade has been tried and endorsed in India by the top sports stars and professionals, including Sachin Tendulkar, Irfan
23
Pathan, Md. Kaif, S. Sreesanth Ramji Srinivasan and Javagal Srinath.
The Gatorade Story

In the summer of 1965, a University of Florida assistant coach sat down with a team of university physicians and asked them to determine why so many of his players were being affected by heat and heat-related illnesses. The researchers Dr. Robert Cade, Dr. Dana Shires, Dr. H. James Free and Dr. Alejandro de Quesada soon discovered that two key factors were causing the Gator players to wilt: the fluids and electrolytes the players lost through sweat were not being replaced, and the large amounts of carbohydrates the players bodies used for energy were not being replenished. The researchers then took their findings into the lab, and scientifically formulated a new, precisely balanced carbohydrate-electrolyte beverage that would adequately replace the key components lost by Gator players through sweating and exercise. They called their concoction Gatorade.
Brand Advantage
What is Gatorade? Gatorade is an optimal mix of water, carbohydrates and essential mineral salts that get absorbed instantly to rehydrate, replenish and refuel like no other beverage can. Gatorade is unlike any other Beverage or Energy Drink! Gatorade quickly restores what the body loses through sweat. Its scientific formulation instantly helps the body restore essential minerals, salts, water and energy lost through action and exercise. Gatorade thus helps one to stay Stronger for Longer. It contains less than half of the sugar that is normally found in energy drinks or soft drinks and even juices.
Did You Know?

Water helps, Gatorade transforms. Gatorade is meant for consumption in active, sporty, hot and sweaty conditions. Gatorade is scientifically formulated and athletically proven to quench thirst.
Quick Brand Facts

Worlds No. 1 Sports Drink Launched in India in 2004 Available in 3 flavours
vi. Kurkure
Brand History
Launched in 1999, this perfect namkeen snack, developed entirely in India, has come to be identified with fun and lovable human quirks. It developed an even stronger identity through associations with well-known Indian actors.
24
About the Brand Brand Promise

Kurkure is a crunchy new-age namkeen snack brand which symbolizes light-hearted fun. Embodying the spirit of India, Kurkure has found a home in millions of hearts and minds and enjoys the position of a strong Lovemark brand in India. Over the years, Kurkure has journeyed effortlessly from being a snack with a twist to becoming an integral part of Indias teatime menu and an embodiment of endearing human imperfections or tedhapan.
Brand Advantage

Made with trusted kitchen ingredients: 100% vegetarian All the raw materials used in Kurkure comply with The Food Safety & Standards Act & Regulations 2006 and rules that govern the manufacture, distribution and sale of Kurkure. All Kurkure ingredients are used daily in households for the preparation of various edible items.
Innovations
Kurkure has constantly re-invented itself to sustain its relevance to Indian culture and the Indian ethos. Not only does Kurkure provide an inimitable taste and superior quality, it has also brought fame and happiness to many through its Chai-time-achievers face on pack initiative.
Quality Standards
Kurkure is made in automated plants at three locations Channo (Punjab), Kolkata and Pune. These plants are audited and certified by various external agencies. The certifications include: 1. HACCP (Hazard Analysis and Critical Control Point). 2. Certification by TQCSI (Australia), which confirms that products are manufactured in a food safety environment and the manufacturing process has adequate controls to track products. 3. American Institute of Baking (USA), one of the best auditing bodies for confirming process and product safety. 4. Our Plants are ISO 14000 certified, which confirms that the manufacturing process ensures environmental safety.
vii. Lay's
Brand History
Lays, the worlds largest and favourite snack food brand, has steadily established itself as an indispensable part of Indias snacking culture since its launch in 1995. With its irresistible taste, international and Indian flavours and youth-centric imagery, Lays has established itself as a
25
youth brand and continues to grow in the hearts and mind of its consumers. Over the years, Lays has become known for its engaging and innovative promotions and campaigns. The brand known for its No one can eat just one campaign has moved its positioning to Whats the programme? making Lays the main food of every programme! Saif Ali Khan has been the face of the brand for over five years, and has recently been joined by the captain of the Indian cricket team M.S. Dhoni. Both embody the youthful energy and appeal of the brand. In 2008, Lays launched the never-before Fight for Your Flavour allowing consumers to vote for the flavour of their choice. The flavour with the maximum votes would continue in the market. The flavours have been selected by the Lays brand ambassadors Saif Ali Khan and M.S. Dhoni with each celebrity rooting for the flavour of their choice. In November 2008, Lays made yet another innovative breakthrough the Chip-n-Sauce pack. This first-to-market pack has been launched for cricket lovers as they settle in their seats to savour the best sporting action of the season. The Lays Chip-n-Sauce large pack comes in two unique flavours Chilli Chinese with a Schezwan Sauce sachet and Chatpata Indian with a Tamarind Sauce sachet inside the pack. In June 2009, Lays launched its new positioning platform: Lays Be a Little Dillogical. The new Dillogical concept makes an instant connect with youth caught between the desire to succeed and the desire to remain engaged with certain moments that offer a deep emotional fulfilment. This friction is like a game between the heart and the head, a struggle between what you want to do and what you have to do. Its all about making things that matter to the heart, happen. The new platform has been launched with a series of ads built around the universal consumer struggle between what the mind asks one to do and what the heart desires. A powerful 360 degree approach supports the new TVC, and has indeed prompted consumers to be a little Dillogical.
Brand Advantage
Lays is 100 percent vegetarian
Quality Standards
1. HACCP(Hazard Analysis and Critical Control Point). 2. Certification by TQCSI (Australia), which confirms that products are manufactured in a food safety environment and the manufacturing process has adequate controls to track products. 3. American Institute of Baking (USA), one of the best auditing bodies for confirming process and product safety. 4. Plants are ISO 14000 certified , which confirms that the manufacturing process ensures environmental safety. 5. their plants are also certified to ensure that the safety of products, processes, environment and people is maintained at a very high level. This certification is issued by OHSAS 18001 (Occupational Health and Safety Assessment Series), USA. The production process begins on farms in select regions across India where the best potatoes are grown specifically for Frito-Lay. Upon the potatoes arrival at plants, it can take
Marketing Of PepsiCo as little as 24 hours for the chips to be made. Lays chips are made using the following simple process:

26
Wash the potatoes are thoroughly bathed in water. Peel next, gently peel the skin off the potatoes, even as the flavour remains intact. Slice The potatoes are thinly sliced and rinsed again to remove any remaining starch. Cook - The slices are cooked to a crispy crunch in edible vegetable oils. Season Finally, the chips are topped off with a mouthwatering sprinkle of salt or seasoning The potatoes have now become delicious chips and are packed and delivered to a store near you.
Did You Know?

Lays is made with Indias best-quality fresh potatoes, simply sliced and cooked in edible vegetable oils, and then seasoned with delicious flavours!
viii. Lehar
Brand History
Lehar was launched in 1996, with innovative small packs and traditional flavours. The brand positioned itself by emphasizing its irresistible taste and using modern imagery. Lehar was re-launched in 2006 and positioned itself using the plank Taste zyaada kyunki oil taza. It promised to deliver good taste through the use of fresh oil in the manufacturing process.
27
Brand Advantage
With the tag line The Joy of Sharing- Khao Khilao Khushiyan Badhao., the brand promises to deliver irresistible namkeens to consumers. Lehar : 'Quality in Every Bite' Lehar are great-tasting, high-quality, Indian and fresh!
Quick Brand Facts

In 2010 moved in extruded, potato chips and bridge Launched in 1996 and re-launched in 2006 Range of varied namkeens using fresh and good quality oil
ix. Mirinda
2012 Brand Campaign
Mirinda has always stood for great bold taste that unleashes uninhibited fun. Taking the promise forward, Mirinda launched two new exciting flavors- Orange Mango and Orange Masala which appeal to the Indian palette. While Orange Mango is the perfect mix of the sweet candy taste of mango flavor and the tanginess of original Mirinda Orange; Orange Masala tickles
28
the taste buds with a hint of fruit masala flavor added to Mirinda Orange. The launch was supported by a robust 360-degree campaign including outdoor, online and a consumer engagement programme to bring alive the taste experience.
Brand History
Mirinda is an international soft drink brand from Spain that was launched in India in 1991. The irresistible taste of Mirinda was communicated through our 1996 Mirinda Men campaign, the 2000 Taste Pe Atka, Mirindaaaa campaign and the Taste Aisa Chaye Character Fisla Jaye campaign of 2003. In 2008, the brand decided to up the ante and deliver a brand philosophy that would resonate strongly with consumers. Consequently, Mirinda adopted a bold and vibrant colour, great orangey taste and sparkling bubbles that encouraged one to be more carefree, spontaneous and playful and occasionally give in to an impulse of uninhibited fun. This was conveyed through the Pagalpanti Bhi Zaroori Hai campaign with Asin in 2008. In 2009, Mirinda established orange as the core of the brand with Orange Dikha Toh Mooh Bola Mirindaaaa.
Quick Brand Facts

1991: Mirinda Orange launched in India. 1998: Mirinda Lemon launched in India.
x. Mountain Dew
Brand History
The main formula of Mountain Dew was invented in Virginia. The drink was named and first marketed in Johnson City, Tennessee and Knoxville, Tennessee in 1948. In India, Mountain Dew set the soft drink category ablaze in 2003 with its iconic
Marketing Of PepsiCo launch campaign Cheetah Bhi Peeta Hai.
29
Brand Advantage
It is a soft drink that exhilarates like no other because of its active, high-energy, extreme citrus taste. The idea of daring, challenges, a can do attitude, adventure and exhilaration are deeply entrenched in its brand DNA. The brand has always celebrated the bold, adventurous and rebellious spirit of youth. This is reflected in the high-adrenaline advertising of the brand and its connection to outdoor adventure.
Did You Know?

Darr Ke Aage Jeet Hai In 2007, the brand was re-launched with a completely new, punchier formulation. Communication aimed at forging a strong emotional connect with the audience. Thus began the Darr Ke Aage Jeet Hai campaign, which acknowledged that fear was a very real aspect of the world of adventure and Mountain Dewwanted young people to believe in themselves in their moment of fear. For beyond fear lay victory. Quick Brand Facts Mountain Dew was invented in Virginia in 1948. It was launched in India in 2003.
xi. Nimbooz
Brand History
Nimbooz was launched in India on the 28th of February 2009. It is the latest addition to the Pepsi beverages portfolio.
Brand Advantage
The brand delivers very strongly on certain expectations. These are:
30
Locally Relevant Taste Nimbooz is a great tasting product. It has capitalized on the existing familiarity with and high consumption of unpackaged / home-made nimbu pani. It has remained true to its authentic Indian Identity by using the traditional Matka (Earthen Pot) and Squeezer in the manufacturing process. Convenience and Great Value The product is available in three convenient formats, 350ml PET, 200ml RGB and 500ml PET at the remarkable price points of Rs 18, Rs 10 and Rs 25 respectively. Accessibility Nimbooz is Indias first nationally available packaged Nimbu Pani. Hygienic It is just like home-made nimbu pani. You can enjoy its natural and delicious lemony refreshment anywhere you go.
Quick Brand Facts

Indias first nationally available packaged Nimbu Pani. It was launched in India in 2009.
xii. Pepsi
Brand History
Pepsi is a hundred-year-old brand loved by over 200 million people worldwide. The largest single selling soft drink brand in India, Pepsi is ubiquitous on just about every social occasion.
Youngistaan loves it. 200 million people
31
worldwide love it. But what has made Pepsi the single largest selling soft drink brand in India is actually a formula concocted a century ago in a faraway continent. 1886, the US. Caleb Bradman, a man with a plan formulated a blockbuster of a digestive drink and decided to call it Brads drink. The potion was to become Pepsi Cola in 1898, and eventually, Pepsi in 1903. Since its inception, Pepsi has always been at the forefront of the beverage industry and has come up with revolutionary concepts such as Diet Pepsi, 2l bottles, recyclable plastic cola bottles and the enviable My Can.
Brand Advantage
Pepsi has become a friend to youth and youth culture. Over generations, youngsters have grown up with Pepsi and have shared an emotional connect with it unlike with any other cola brand. Be it parties, hangouts with friends, or just another day at home, a day is never complete without the fizz of Pepsi! Pepsi has always fuelled youth passions like cricket, Bollywood, music and now football. Youth icons like MS Dhoni, Ranbir Kapoor, Didier Drogba, Virendar Sehwag, Sachin Tendulkar, Priyanka Chopra and Deepika Padukone have endorsed Pepsi since its launch in India. Pepsi Changed the Game during the 2011 cricket world cup by challenging convention, celebrating the unorthodox and by becoming the official sponsor of everything that was unofficial about the sport! Change the Game even as a thought has gained enormous popularity and generated tremendous buzz. Taking the same theme forward in 2012, Pepsi changed the game yet again by taking the lead in celebrating the exciting new platform of football. Having brought the biggest international football stars and pitching them against the mighty Indian cricketers in a classic faceoff for Pepsi is something which only a brand like Pepsi can deliver.
Quick Brand Facts

Flagship brand of PepsiCo. 100 year old brand loved by over 200 million people worldwide. An iconic youth brand in India. The single largest selling soft drink brand in India.
xiii. Quaker Oats

Brand History
The brand Quaker is more than 130 years old and is a world leader in the oatmeal segment. Quaker Oats was launched in India in 2006. It has a national presence and has a range of Quick Cooking Oats. Recently Quaker Oats launched 4 new sweet and savoury oats to its portfolio.
32
Quaker Oats Benefits

Quaker Oats is a 100% wholegrain and natural source of carbohydrates and dietary fibre. It has strong heart health benefits, which is scientifically proven to help reduce cholesterol. As per US FDA, there was significant scientific agreement that the 3g of eta Glucan, soluble fibre daily from oats, in a diet low in saturated fat and cholesterol, may help reduce the risk of heart disease.
With the launch of the new range of flavours, Quaker Oats original goodness of wholegrain nutrition now gets the added benefit of great taste. Whats more, with its real fruit & vegetable inclusions this healthy & great tasting bowl of breakfast from Quaker Oats comes at just INR10/-## and promises to appeal to consumers across age groups. All the four new flavours have healthy inclusions of real fruits and vegetables, topped in local Indian flavours. While the Strawberry flavour with Apple has real apple pieces, the Kesar flavour with Kishmish has real raisins.
xiv. Slice
Brand History
Slice was launched in India in 1993 as a refreshing mango drink and quickly went on to become a leading player in the category. In 2008, Slice was relaunched with a winning product formulation that
33
made consumers fall in love with its taste. With new pack graphics and clutter-breaking advertising, Slice has built a powerful appeal.
Brand Advantage
With the launch of the Aamsutra campaign in 2008, its winning taste and appealing pack graphics, Slice created a great deal of excitement in its category and celebrated the indulgence in mangoes like no other brand had done before. While other players have portrayed the mango as a simple and innocent fruit, Slice celebrates the sheer indulgence and sensuality involved in consuming a mango. The creative Aamsutra idea communicates the experience of extreme sensuous pleasure through the act of drinking Slice. Slice was the first brand ever in the Juice and Juice Drinks category to sign on Bollywood diva Katrina Kaif as the brand ambassador for Slice. In 2009, Slice took the notion of indulgence to a whole new level with the launch of the Slice Pure Pleasure Holidays, giving its consumers a chance to win luxurious allexpenses-paid holidays to dream European destinations like Paris, Vienna, Greece and Venice.
Quick Brand Facts

Slice was launched in India in 1993 Slice Mangola was introduced in 1994
xv. Tropicana
Brand History
Tropicana was founded in Bradenton, Florida, USA, in 1947. It is now enjoyed almost everywhere in the world. Carefully nurtured for over 50 years, Tropicana has matured into one of the most respected beverage brands.
34
Tropicana is the #1 brand in packaged 100% Juice* in the world in 2011 in off-trade volume. It is today available in 63 countries. Since 1998, Tropicana has been owned by PepsiCo, Inc. Tropicana Premium Gold was re-launched as Tropicana 100% in 2008.
Brand Advantage
Tropicana continues to select the best fruit to manufacture high-quality juices and original products, pioneer innovative processes and explore new markets for its products. It is committed to fostering healthy lifestyles by ensuring that its products are naturally nutritious and provide the daily benefits that one needs. In India, Tropicana comes in two categories: 100% Juices (sold as Tropicana 100%) and Juice Beverages (sold as Tropicana).
Quick Brand Facts

Launched in India in 2004. Available in two categories - 100 percent juice and juice-based drinks. *Source Euromonitor International Limited; *100% Juice excludes Nectars (25-99% juice content) and Juice Drinks (upto 24% juice content).
xvi. Uncle Chipps

Brand History
Launched in 1992, Uncle Chipps was a pioneer in branded potato chips in India. The brand was acquired from Amrit Agro Ltd. in 2000 by Frito-Lay India. After the acquisition, the hugely popular brand has grown from strength to strength and has built a powerful connection with consumers. Uncle Chipps is warm, playful, lively,
35
companionable and traditional at heart, just like the good-natured uncle everyone in the family relates to and no family gathering is complete without!
Brand Advantage
Quality Standards The production process begins on farms in select regions across India where the best potatoes are grown specifically for Frito-Lay to make great-tasting chips. Upon the potatoes arrival at plants, it can take as little as 24 hours for the chips to be made. Lays Chips are made using the following simple process:

Wash the potatoes are thoroughly bathed in water. Peel next, gently peel the skin off the potatoes, even as the flavour remains intact. Slice the potatoes are thinly sliced and rinsed again to remove any remaining starch. Cook the slices are cooked to a crispy crunch in edible vegetable oil. Season finally, the chips are topped off with a mouthwatering sprinkle of salt or seasoning. The potatoes have now become delicious chips and are packed and delivered to a store near you.
Quick Brand Facts

Uncle Chips was launched in 1992. Frito-Lay India took over Uncle Chipps in 2000. Pioneer in branded potato chips in India.
V. The Environment in Which PEPSICO Operate

Over the past several years, a number of forces have combined to radically reshape the external environment in which the food and beverage industry operates. These changes have had a major impact on where and how companies must compete to survive and thrive. Global macroeconomic growth has slowed significantly, and the outlook remains mixed, particularly in developed markets. Global economic power is becoming more distributed, with the East becoming a larger player in the world. The demographic equation in the West is shifting, with an increasing share of consumption in the hands of boomers, women and smaller households, and rapid growth of diverse ethnic and immigrant communities across countries.
36
Intensifying consumer and government focus on health and wellness is changing the relative growth trajectory of categories and products. Consumers are clearly changing their habits, preferences and consumption patterns. Food safety and security are now front and center in the minds of governments and consumers, increasing the need for robust systems within companies to ensure ingredient and product traceability. Sustained commodity price increases and volatility have challenged company cost structures. Meanwhile, there is a strong and growing environmental consciousness emerging in societies around the world as the focus on water use, waste disposal (especially of plastic) and energy use by industry receives additional scrutiny. Lastly, the global retail environment is transforming. In emerging and developing markets, the growth of organized modern trade is beginning to slowly replace traditional mom and pop stores, and in developed markets, new discount channels like hard discounters and dollar stores are rapidly growing. Additionally, online retailing is beginning to make inroads into pepsico categories while social media amplifies positive messages and rumors in the blink of an eye. The combination of these shifts has put considerable pressure on the food and beverage industry. The growth outlook in some developed markets and categories has slowed significantly, while emerging and developing markets require new skills for success. Traditional approaches and legacy capabilities are no longer sufficient to compete in these spaces. But these changes also have given rise to unparalleled opportunities for PepsiCo. For one, the convenience trend is accelerating around the world, driving the growth of pepsico categories. The strong outlook in emerging and developing markets for all products and the demand for Good for- You products and categories in key markets also present major growth opportunities. Other potential new areas of expansion for us are premium-priced products, products for aging populations and value offerings for those with lower incomes. As a global company with positions in every key market in the world, PepsiCos sheer scale as well as product and geographic diversity give us the ability to power through country-specific trends and still deliver superior returns. Pepsico iconic brands are trusted in every country to deliver a quality product that meets the highest global safety standards. Track record of ethical performance and quality products provides comfort to consumers and governments the world over.
VI. Accelerated the Benefits of One PepsiCo

PepsiCos strength lies in the fact that portfolio is diverse, but related. The convenient snack and beverage businesses have high levels of coincidence of purchase and consumption and very high velocities at the shelf. PepsiCo believe this portfolio complementarity provides a natural hedge, allowing us to manage through individual category issues and still deliver good returns. Portfolio provides us three additional major benefits. First, cost leverage: PepsiCo are an important customer to key vendors in the food and beverage space. PepsiCo have preferred partner status with many of them, which
Marketing Of PepsiCo allows us to strategically make use of each others supply chains and development efforts to meaningfully reduce their input costs while accessing their best talent and advanced thinking. Additionally, inside PepsiCo, across businesses, Pepsico share infrastructure including corporate functions, master data and back office processing, further lowering their costs. Second, capability sharing: Over the past few years, Pepsico have harmonized many of their processes, making it easier to move talent across the companyboth businesses and geographies. PepsiCo are able to attract world-class talent and give them a truly diverse, but related set of experiences, allowing us to build a world-class workforce. PepsiCo lift and shift best practices across the value chain. For example, the expertise Pepsico have developed in increasing yields while conserving water helps us get more crop per drop in their agricultural operations throughout the world, be it potatoes or corn for their snacks, or fruits and vegetables for their juice business. Because of the high coincidence of consumption of their products, PepsiCo have developed a common consumer demand framework underpinned by a global database, giving us proprietary insights into food and beverage occasions. This guides their innovation actions at the global and local level. Third, commercial benefits: As the second-largest food and beverage business in the world and the largest in the U.S., PepsiCo are traffic generators and therefore viewed as a critical growth driver by retailers. Just in the U.S., Pepsico have nine of the top 40 trademarks at retail, more than any other food and beverage company. Retailers benefit from their in-store promotions that leverage powerful properties such as the National Football League, Major League Baseball and the National Hockey League in the U.S.; talented soccer players like Lionel Messi, who appeared in both Pepsi and Lays commercial activities globally; as well as through mini-films like the Bring Happiness Home Chinese New Year production that brought together Lays, Tropicana and Pepsi to deliver an emotional public service message to Chinese consumers Go home to your families for Chinese New Year. This film garnered more than 700 million views in China alone. All these activities increased coincidence of purchases between beverages and snacks and their healthy breakfast bundles, and in 2012, made us the second-largest growth contributor in all measured U.S. retail channels combined. Foodservice customers are also beginning to benefit from the power of PepsiCos portfolio: Taco Bell in the U.S. is a case in point. For more than 45 years, Pepsico have been their beverage partner of choice. Mountain Dew Baja Blast, a flavor developed exclusively for Taco Bell, has been a best-selling traffic driver in its system since launch. In 2012, building on this beverage relationship, Pepsico partnered with Taco Bell to introduce Doritos Locos Tacos, a taco with a shell made from real Nacho Cheese Doritos that has become the restaurants biggest success in its 50-year history. In nine months alone, Taco Bell sold more than 325 million Doritos Locos Tacosone of the most success fulnew products in the foodservice industry in 2012. In 2013, we expect to continue building on this success, with the launch of Cool Ranch Doritos Locos Tacos. More importantly, we are innovating now on the beverage front with the launch of Mountain Dew Baja Blast Freeze. The pairing of the Doritos and Mountain Dew brands is a natural: In the U.S. convenience channel, Doritos is the number one salty snack, while Mountain Dew is the number one single-serve carbonated soft drink. An example of a market where Pepsico truly leverage the cost, capability and commercial benefits from their broad portfolio is Russia.
37
38
Pepsico business is operated as an integrated whole, with shared offices, infrastructure, talent, supply chain and go-to-market systems. Pepsico are an extremely efficient and effective leader in the food and beverage business in that countrylowering our costs significantly and expanding the reach of their products several fold. Pepsi believe their whole is worth more than the sum of their parts. It is Power of One. Doritos Locos Tacos. More importantly, we are innovating now on the beverage front with the launch of Mountain Dew Baja Blast Freeze. The pairing of the Doritos and Mountain Dew brands is a natural: In the U.S. convenience channel, Doritos is the number one salty snack, while Mountain Dew is the number one single- serve carbonated soft drink.
VII. Aggressively Building New Capabilities

Brand Building
In 2012, Pepsico significantly stepped up their advertising and marketing investments, with a focus on 12 megabrands: in beverages, Pepsi, Mountain Dew, Sierra Mist (in the U.S.) and 7UP (outside the U.S.), Lipton ready-to-drink teas and Mirinda; in snacks, Lays, Doritos, Cheetos and SunChips; and in their nutrition business, Quaker, Tropicana and Gatorade. Pepsico launched bold new brand positioning with their global Pepsi Live for Now campaign and fresh Tropicana messaging in North America and Europe; upped their game in digital marketing with the Lipton Brisk Star Wars game app for mobile phones; and placed first on the Ad Meter rankings for Super Bowl XLVI with Doritos fan-created commercials.
39
DO uS a flavOr
Pepsico Do Us A Flavor contest which invites consumers to submit flavor ideasbegan in the U.K. and has since been lifted and shifted to 17 markets, including Australia, Egypt, Poland, India, South Africa and Saudi Arabia. In 2012, to mark the 75th anniversary of Lays, Pepsico launched the Do Us A Flavor campaign in the U.S., receiving nearly 4 million fan submissions in response.
Innovation
Accelerating innovation is a key priority for PepsiCo. PepsiCo have invested in Research & Development and built new capabilities to help us develop breakthrough innovation that delivers sustainable incremental growth. Innovation from products launched in the past three years accounted for approximately eight percent of PepsiCo net revenue in 2012.
Meeting Consumer Demand

Innovation enables us to meet growing consumer demand for tasty and convenient nutrition with Good-for-You choices such as Quaker Real Medleys, Gatorade Prime Energy Chews for athletes, Tropicana Farmstand and Chudo Kasha cereal (in Russia). Through innovation, we provide Better-forYou choices with reduced sugar, salt and saturated fat, without compromising on taste. Betterfor- You choices launched in 2012 included Pepsi NEXT, Lays Forno (in Saudi Arabia) and Starbucks Refreshers. Innovation also means new Fun-for-You tastes, textures and experiences, with offerings such as Doritos JACKED and Walkers Deep Ridged (in the U.K. and Ireland).
Research & Development

In the last five years, we have transformed the R&D organization at PepsiCo to create a global network, develop strong core research capabilities and build deep scientific skills. Our R&D team includes experts from a wide range of scientific disciplines who help keep PepsiCo on the leading edge of our industry. The team is focused on delivering science backed innovation to meet consumer needs and grow our businesses. GlOBal
VIII. Strengthening a Second-to-None Team and Culture

Celebrating Diversity, Fostering Inclusion
As a company doing business in more than 200 countries and territories, diversity and inclusion have never been more vital to our success. Being as diverse as our consumers enables us to understand, firsthand, how to meet their needs. A safe and inclusive workplace that values different perspectives builds employee engagement, fosters creativity and fuels innovation. The vignettes below offer but a few examples of how PepsiCo both supports and benefits from diversity and inclusion.
Growing the number of women leaders
40
Pepsico are committed to increasing the number of women leaders within PepsiCo through recruiting and development initiatives around the world. In Asia, Middle East and Africa sector, for example, the percentage of newly hired or promoted executives who are women exceeds 50 percent. Tailored programs enable progress: In Saudi Arabia, Pepsico have constructed workplaces that respect local customs while enabling women to work and advance. Pepsico Saudi team includes 25 women hired in 2011 and 2012 in both management and front-line roles.
Taking a stand for equality

As a global company, PepsiCo works in countries with a broad array of laws and regulations. Regardless of where Pepsico operate, PepsiCo takes great care to respect the diversity, talents and abilities of all. At PepsiCo, we define diversity as all the unique characteristics that make up each of us: personality, lifestyle, thought processes, work experience, ethnicity, race, color, religion, gender, gender identity, sexual orientation, marital status, age, national origin, disability, veteran status, or other differences.
Recruiting veterans to our company

Pepsico efforts to recruit U.S. military veterans to PepsiCo have earned us a place on the G.I. Jobs ranking of Top 100 Military Friendly Employers. Only the top two percent of thousands of eligible companies make the Top 100 ranking. On the 2013 list, PepsiCo is the only food and beverage company in the top 50. Creating opportunities for differently-abled people Our PepsiCo Mexico Foods as well as our Middle East business exemplify how PepsiCo creates opportunities for differently-abled people. Both of these businesses have developed strong track records for hiring and developing the talents of people with hearing impairments. The accomplishments of these associates are a source of pride for our entire company. Supporting our local communities Pepsico believe that they have a responsibility to the communities where they operate. Pepsico U.K. team, for example, partners with a charity called Magic Breakfast to help alleviate hunger. Thanks to this partnership, which is supported by our Quaker and Tropicana businesses, about 6,000 children in the U.K. begin their day with a nutritious breakfast.
Honoring Pepsico Associates

Every day, PepsiCo associates show their passion for the business. During challenging times, their associates have demonstrated great courage. When Hurricane Sandy brought terrible devastation to the Eastern U.S., teams of PepsiCo associates worked tirelessly to help communities in New York and New Jersey. In the Philippines, when heavy monsoon rains and a typhoon caused flooding in Manila, our associates took action, providing aid to those in need. And through political unrest and transition, our associates in Egypt safely kept our business on track. With their unwavering dedication to our consumers, customers and communities, our PepsiCo associates around the world are second to none. Pepsico thank and salute them.
41
In 2012, PepsiCo was listed among the Top 25 Worlds Best Multinational Workplaces by the Great Place to Work Institute. Market Risks
Pepsico are exposed to market risks arising from adverse changes in: commodity prices, affecting the cost of our raw materials and energy; foreign exchange rates and currency restrictions; and interest rates. In the normal course of business, we manage these risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging strategies. Ongoing productivity initiatives involve the identification and effective implementation of meaningful cost-saving opportunities or efficiencies. Pepsico global purchasing programs include fixed-price purchase orders and pricing agreements. Pepsico hedging strategies include the use of derivatives. Certain derivatives are designated as either cash flow or fair value hedges and qualify for hedge accounting treatment, while others do not qualify and are marked to market through earnings. Cash flows from derivatives used to manage commodity, foreign exchange or interest risks are classified as operating activities. Pepsico do not use derivative instruments for trading or speculative purposes. Pepsico perform assessments of our counterparty credit risk regularly, including a review of credit ratings, credit default swap rates and potential nonperformance of the counterparty. Based on our most recent assessment of our counterparty credit risk, we consider this risk to be low. In addition, we enter into derivative contracts with a variety of financial institutions that we believe are creditworthy in order to reduce our concentration of credit risk. Unfavorable economic conditions may have an adverse impact on our business results or financial condition. The fair value of our derivatives fluctuates based on market rates and prices. The sensitivity of our derivatives to these market fluctuations is discussed below. Inflationary, deflationary and recessionary conditions impacting these market risks also impact the demand for and pricing of our products.
Commodity Prices
Pepsico expect to be able to reduce the impact of volatility in our raw material and energy costs through our hedging strategies and ongoing sourcing initiatives. We use derivatives, with terms of no more than three years, to economically hedge price fluctuations related to a portion of our anticipated commodity purchases, primarily for agricultural products, metals and energy. Pepsico open commodity derivative contracts that qualify for hedge accounting had a face value of $507 million as of December 29, 2012 and $598 million as of December 31, 2011. At the end of 2012, the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have increased our net unrealized losses in 2012 by $49 million. Pepsico open commodity derivative contracts that do not qualify for hedge accounting had a face value of $853 million as of December 29, 2012 and $630 million as of December 31, 2011. At the end of 2012, the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have increased our net losses in 2012 by $85 million.
Foreign Exchange
42
Financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensive loss within PepsiCo common shareholders equity under the caption currency translation adjustment. Pepsico operations outside of the U.S. generate 49% of our net revenue, with Russia, Mexico, Canada, the United Kingdom and Brazil comprising approximately 25% of our net revenue. As a result, Pepsico are exposed to foreign currency risks. During 2012, unfavorable foreign exchange reduced net revenue growth by 2.5 percentage points, primarily due to depreciation of the Russian ruble, euro, Brazilian real and the Mexican peso. Currency declines against the U.S. dollar which are not offset could adversely impact our future results. The results of Pepsico Venezuelan businesses have been reported under hyperinflationary accounting since the beginning of our 2010 fiscal year, at which time the functional currency of our Venezuelan entities was changed from the bolivar fuerte (bolivar) to the U.S. dollar. As a result of the change to hyperinflationary accounting and the devaluation of the bolivar, we recorded an after-tax net charge of $120 million in 2010. In 2012 and 2011, the majority of our transactions and net monetary assets qualified to be remeasured at the official exchange rate of obtaining U.S. dollars for dividends through the government-operated Foreign Exchange Administration Board (CADIVI) (4.3 bolivars per dollar for 2012 and 2011). In 2012 and 2011, our operations in Venezuela comprised 7% and 8% of our cash and cash equivalents balance, respectively, and generated 1% of our net revenue in 2012 and less than 1% of our net revenue in 2011. Effective February 2013, the Venezuelan government devalued the bolivar by resetting the official exchange rate to 6.3 bolivars per dollar. We expect that the impact of the devaluation on PepsiCos 2013 net revenue and operating profit will not be material. The above impact excludes an after-tax net charge of approximately $100 million associated with the remeasurement of bolivar denominated net monetary assets. This after-tax net charge will be reflected in items affecting comparability in our 2013 first quarter Form 10-Q. We continue to use available options to obtain U.S. dollars to meet our operational needs. We are also exposed to foreign currency risk from foreign currency purchases and foreign currency assets and liabilities created in the normal course of business. We manage this risk through sourcing purchases from local suppliers, negotiating contracts in local currencies with foreign suppliers and through the use of derivatives, primarily forward contracts with terms of no more than two years. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred. Our foreign currency derivatives had a total face value of $2.8 billion as of December 29, 2012 and $2.3 billion as of December 31, 2011. At the end of 2012, we estimate that an unfavorable 10% change in the exchange rates would have increased our net unrealized losses by $134 million. For foreign currency derivatives that do not qualify for hedge
43
accounting treatment, all losses and gains were offset by changes in the underlying hedged items, resulting in no net material impact on earnings. Interest Rates We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies. We use various interest rate derivative instruments including, but not limited to, interest rate swaps, cross-currency interest rate swaps, Treasury locks and swap locks to manage our overall interest expense and foreign exchange risk. These instruments effectively change the interest rate and currency of specific debt issuances. Certain of our fixed rate indebtedness has been swapped to floating rates. The notional amount, interest payment and maturity date of the interest rate and cross-currency swaps match the principal, interest payment and maturity date of the related debt. Our Treasury locks and swap locks are entered into to protect against unfavorable interest rate changes relating to forecasted debt transactions. The notional amounts of the interest rate derivative instruments outstanding as of December 29, 2012 and December 31, 2011 were $8.1 billion and $8.3 billion, respectively. Assuming year-end 2012 variable rate debt and investment levels, a 1-percentage-point increase in interest rates would have increased net interest expense by $9 million in 2012. Risk Management Framework The achievement of our strategic and operating objectives necessarily involves taking risks. Our risk management process is intended to ensure that risks are taken knowingly and purposefully. As such, we leverage an integrated risk management framework to identify, assess, prioritize, address, manage, monitor and communicate risks across the Company. This framework includes: PepsiCos Board of Directors, which is responsible for overseeing the assessment and mitigation of the Companys top risks, receives updates on key risks throughout the year. The Audit Committee of the Board of Directors helps define PepsiCos risk management processes and assists the Board in its oversight of strategic, financial, operating, business, compliance, safety, reputational and other risks facing PepsiCo. The Compensation Committee of the Board of Directors assists the Board in overseeing potential risks that may be associated with the Companys compensation programs; The PepsiCo Risk Committee (PRC), comprised of a crossfunctional, geographically diverse, senior management group which meets regularly to identify, assess, prioritize and address our key risks; Division Risk Committees (DRC), comprised of cross-functional senior management teams which meet regularly
44
to identify, assess, prioritize and address division-specific business risks; PepsiCos Risk Management Office, which manages the overall risk management process, provides ongoing guidance, tools and analytical support to the PRC and the DRCs, identifies and assesses potential risks and facilitates ongoing communication between the parties, as well as with PepsiCos Audit Committee and Board of Directors; PepsiCo Corporate Audit, which evaluates the ongoing effectiveness of our key internal controls through periodic audit and review procedures; and PepsiCos Compliance & Ethics Department, which leads and coordinates our compliance policies and practices. Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation. The conduct of our businesses, including the production, storage, distribution, sale, advertising, marketing, labeling, health and safety practices, transportation and use of many of our products, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to laws and regulations administered by government entities and agencies outside the United States in markets in which our products are made, manufactured or sold, including in emerging and developing markets where legal and regulatory systems may be less developed. These laws and regulations and interpretations thereof may change, sometimes dramatically, as a result of political, economic or social events. Such changes may include changes in: food and drug laws; laws related to product labeling, advertising and marketing practices; laws regarding the import of ingredients used in our products; laws regarding the import or export of our products; laws and programs aimed at reducing ingredients present in certain of our products, including sodium, saturated fat and added sugar; regulatory actions targeting the snack food or beverage industries such as restrictions on the sale of snack and beverage products in publicly regulated venues or restrictions on the use of the Supplemental Nutrition Assistance Program to purchase certain snacks or beverages; increased regulatory scrutiny of, and increased litigation involving, product claims and concerns regarding the effects on health of ingredients in, or attributes of, certain of our products, including without limitation those found in energy drinks; state consumer protection laws; taxation requirements, including taxes that would increase the cost of our products to consumers; competition laws; employment laws; privacy laws; laws regulating the price we may charge for our products; laws regulating access to and use of water or utilities; and environmental laws, including laws relating to the
45
regulation of water rights and treatment. New laws, regulations or governmental policy and their related interpretations, or changes in any of the foregoing, may alter the environment in which we do business and, therefore, may impact our results or increase our costs or liabilities. Governmental entities or agencies in jurisdictions where we operate may also impose new labeling, product or production requirements, or other restrictions. Studies are underway by third parties to assess the health implications of consumption of certain ingredients present in some of our products, including sugar, artificial sweeteners, as well as substances such as acrylamide that are naturally formed in a wide variety of foods when they are cooked (whether commercially or at home), including french fries, potato chips, cereal, bread and coffee. Certain of these studies of acrylamide found that it is probable that acrylamide causes cancer in laboratory animals when consumed in extraordinary amounts. If consumer concerns about the health implications of consumption of certain ingredients present in some of our products, including sugar, artificial sweeteners, or acrylamide increase as a result of these studies, other new scientific evidence, or for any other reason, whether or not valid, demand for our products could decline and we could be subject to lawsuits or new regulations that could affect sales of our products, any of which could have an adverse effect on our business, financial condition or results of operations. We are also subject to Proposition 65 in California, a law which requires that a specific warning appear on any product sold in California that contains a substance listed by that State as having been found to cause cancer or birth defects. If we were required to add warning labels to any of our products or place warnings in certain locations where our products are sold, sales of those products could suffer not only in those locations but elsewhere. In many jurisdictions, compliance with competition laws is of special importance to us due to our competitive position in those jurisdictions. Regulatory authorities under whose laws we operate may also have enforcement powers that can subject us to actions such as product recall, seizure of products or other sanctions, which could have an adverse effect on our sales or damage our reputation. Although we have policies and procedures in place that are designed to promote legal and regulatory compliance, our employees or suppliers could take actions that violate these policies and procedures or applicable laws or regulations. Violations of these laws or regulations could subject us to criminal or civil enforcement actions which could have a material adverse effect on our business. In addition, we and our subsidiaries are party to a variety of legal and environmental remediation obligations arising in the normal course of business, as well as environmental remediation,
46
product liability, toxic tort and related indemnification proceedings in connection with certain historical activities and contractual obligations of businesses acquired by our subsidiaries. Due to regulatory complexities, uncertainties inherent in litigation and the risk of unidentified contaminants on current and former properties of ours and our subsidiaries, the potential exists for remediation, liability and indemnification costs to differ materially from the costs we have estimated. We cannot guarantee that our costs in relation to these matters will not exceed our established liabilities or otherwise have an adverse effect on our results of operations. See Our financial performance could be adversely affected if we are unable to grow our business in emerging and developing markets or as a result of unstable political conditions, civil unrest or other developments and risks in the markets where our products are sold. Our financial performance could suffer if we are unable to compete effectively. The food, snack and beverage industries in which we operate are highly competitive. We compete with major international food, snack and beverage companies that, like us, operate in multiple geographic areas, as well as regional, local and private label manufacturers and other value competitors. We compete with other large companies in each of the food, snack and beverage categories, including Nestl S.A., Danone, Mondelz International, Kellogg Company, General Mills and DPSG. In many countries where we do business, including the United States, our primary beverage competitor is The Coca-Cola Company. We compete on the basis of brand recognition, taste, price, quality, product variety, distribution, marketing and promotional activity, convenience, service and the ability to identify and satisfy consumer preferences. If we are unable to compete effectively, we may be unable to grow or maintain sales or gross margins in the global market or in various local markets. This may have a material adverse impact on our revenues and profit margins. See also Unfavorable economic conditions may have an adverse impact on our business results or financial condition. Our financial performance could be adversely affected if we are unable to grow our business in emerging and developing markets or as a result of unstable political conditions, civil unrest or other developments and risks in the markets where our products are sold. Our operations outside of the United States, particularly in Russia, Mexico, Canada and the United Kingdom, contribute significantly to our revenue and profitability, and we believe that our emerging and developing markets, particularly China, India, Brazil and the Africa and Middle East regions, present important future growth opportunities for us. However, there can be no assurance that our existing products, variants of our existing products or new products that we make,
47
manufacture, market or sell will be accepted or successful in any particular emerging or developing market, due to local or global competition, product price, cultural differences or otherwise. If we are unable to expand our businesses in emerging and developing markets, or achieve the return on capital we expect as a result of our investments, particularly in Russia, as a result of economic and political conditions, increased competition, reduced demand for our products, an inability to acquire or form strategic business alliances or to make necessary infrastructure investments or for any other reason, our financial performance could be adversely affected. Unstable economic or political conditions, civil unrest or other developments and risks in the markets where our products are sold, including in Europe, Venezuela, Mexico, the Middle East and Egypt, could also have an adverse impact on our business results or financial condition. Factors that could adversely affect our business results in these markets include: foreign ownership restrictions; nationalization of our assets; regulations on the transfer of funds to and from foreign countries, which, from time to time, result in significant cash balances in foreign countries such as Venezuela, and on the repatriation of funds; currency hyperinflation, devaluation or fluctuation, such as the devaluation of the Venezuelan bolivar; the lack of well-established or reliable legal systems; and increased costs of business due to compliance with complex foreign and United States laws and regulations that apply to our international operations, including the Foreign Corrupt Practices Act and the U.K. Bribery Act, and adverse consequences, such as the assessment of fines or penalties, for failing to comply with these laws and regulations. In addition, disruption in these markets due to political instability or civil unrest could result in a decline in consumer purchasing power, thereby reducing demand for our products. See Demand for our products may be adversely affected by changes in consumer preferences and tastes or if we are unable to innovate or market our products effectively., Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation., Our financial performance could suffer if we are unable to compete effectively., Disruption of our supply chain could have an adverse impact on our business, financial condition and results of operations. and Failure to successfully complete or integrate acquisitions and joint ventures into our existing operations, or to complete or manage divestitures or refranchising, could have an adverse impact on our business, financial condition and results of operations. Our operating results may be adversely affected by increased costs, disruption of supply or shortages of raw materials and other supplies. We and our business partners use various raw materials and
48
other supplies in our business. The principal ingredients we use include apple, orange and pineapple juice and other juice concentrates, aspartame, corn, corn sweeteners, flavorings, flour, grapefruit and other fruits, oats, oranges, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils and wheat. Our key packaging materials include plastic resins, including polyethylene terephthalate (PET) and polypropylene resin used for plastic beverage bottles and film packaging used for snack foods, aluminum used for cans, glass bottles, closures, cardboard and paperboard cartons. Fuel and natural gas are also important commodities for us due to their use in our facilities and in the trucks delivering our products. Some of these raw materials and supplies are sourced internationally and some are available from a limited number of suppliers or are in shortest supply when seasonal demand is at its peak. We are exposed to the market risks arising from adverse changes in commodity prices, affecting the cost of our raw materials and energy, including fuel. The raw materials and energy which we use for the production of our products are largely commodities that are subject to price volatility and fluctuations in availability caused by changes in global supply and demand, weather conditions, agricultural uncertainty or governmental incentives and controls. We purchase these materials and energy mainly in the open market. If commodity price changes result in unexpected increases in raw materials and energy costs, we may not be able to increase our prices to offset these increased costs without suffering reduced volume, revenue and operating results. In addition, we use derivatives to hedge price risk associated with forecasted purchases of certain raw materials and energy, including fuel. Certain of these derivatives that do not qualify for hedge accounting treatment can result in increased volatility in our net earnings in any given period due to changes in the spot prices of the underlying commodities. See also Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation., Unfavorable economic conditions may have an adverse impact on our business results or financial condition., Climate change, or legal, regulatory or market measures to address climate change, may negatively affect our business and operations., Market Risks and Note 1 to our consolidated financial statements. Failure to realize anticipated benefits from our productivity plan or global operating model could have an adverse impact on our business, financial condition and results of operations. We are implementing a strategic plan that we believe will position our business for future success and growth, to allow us to achieve a lower cost structure and operate efficiently in the highly competitive food, snack and beverage industries.
49
In order to capitalize on our cost reduction efforts, it will be necessary to make certain investments in our business, which may be limited due to capital constraints. In addition, it is critical that we have the appropriate personnel in place to continue to lead and execute our plan. Our future success and earnings growth depends in part on our ability to reduce costs and improve efficiencies. If we are unable to successfully implement our productivity plan or fail to implement it as timely as we anticipate, our business, financial condition and results of operations could be adversely impacted. In addition, we have launched a global operating model to improve efficiency, decision making, innovation and brand management across the global PepsiCo organization. If we are unable to implement this model effectively, it may have a negative impact on our ability to deliver sustained or breakthrough innovation or to otherwise compete effectively. Mark-to-Market Net Impact We centrally manage commodity derivatives on behalf of our divisions. These commodity derivatives include agricultural products, metals and energy. Certain of these commodity derivatives do not qualify for hedge accounting treatment and are marked to market with the resulting gains and losses recognized in corporate unallocated expenses. These gains and losses are subsequently reflected in division results when the divisions take delivery of the underlying commodity. Therefore, the divisions realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses. In 2012, we recognized $65 million ($41 million after-tax or $0.03 per share) of mark-to-market net gains on commodity hedges in corporate unallocated expenses. In 2011, we recognized $102 million ($71 million after-tax or $0.04 per share) of mark-to-market net losses on commodity hedges in corporate unallocated expenses. In 2010, we recognized $91 million ($58 million after-tax or $0.04 per share) of mark-to-market net gains on commodity hedges in corporate unallocated expenses. Merger and Integration Charges In 2012, we incurred merger and integration charges of $16 million ($12 million after-tax or $0.01 per share) related to our acquisition of WBD, including $11 million recorded in the Europe segment and $5 million recorded in interest expense. In 2011, we incurred merger and integration charges of $329 million ($271 million after-tax or $0.17 per share) related to our acquisitions of PBG, PAS and WBD, including $112 million recorded in the PAB segment, $123 million recorded in the Europe segment, $78 million recorded in corporate unallocated expenses and $16 million recorded in interest expense. These charges also include closing costs and advisory fees related to our acquisition of WBD.
50
In 2010, we incurred merger and integration charges of $799 million related to our acquisitions of PBG and PAS, as well as advisory fees in connection with our acquisition of WBD. $467 million of these charges were recorded in the PAB segment, $111 million recorded in the Europe segment, $191 million recorded in corporate unallocated expenses and $30 million recorded in interest expense. The merger and integration charges related to our acquisitions of PBG and PAS were incurred to help create a more fully integrated supply chain and go-to-market business model, to improve the effectiveness and efficiency of the distribution of our brands and to enhance our revenue growth. These charges also include closing costs, one-time financing costs and advisory fees related to our acquisitions of PBG and PAS. In addition, we recorded $9 million of merger-related charges, representing our share of the respective merger costs of PBG and PAS, in bottling equity income. In total, the above charges had an after-tax impact of $648 million or $0.40 per share.

Pepsico

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pepsico

Uploaded by

Copyright:

Available Formats

Marketing Of PepsiCo

I.i. - PepsiCo India Region: Leadership

I.iii. - Area Of Business

PepsiCo Americas Foods

PepsiCo Americas Beverages

PepsiCo Asia, Middle East & Africa

I.iv. Corporate Governance

I.v. - Mission and Vision

Performance with Purpose

I.vi. - PepsiCo Values & Philosophy

I.vii. - Global Code of Conduct

II.ii. - Human Sustainability

Global goals include:

II.ii. - Environmental Sustainability

Goals and Commitments

Climate Change: Reduce the carbon footprint of their operations

III - Board Of Directors

Shown in photo, left to right:

Chester- The Cheetos Mascot

The Cheetos portfolio

Dukes Refreshing Mumbai!!

Pathan, Md. Kaif, S. Sreesanth Ramji Srinivasan and Javagal Srinath.

The Gatorade Story

Did You Know?

Quick Brand Facts

Worlds No. 1 Sports Drink Launched in India in 2004 Available in 3 flavours

About the Brand Brand Promise

Did You Know?

Quick Brand Facts

Quick Brand Facts

Marketing Of PepsiCo launch campaign Cheetah Bhi Peeta Hai.

Did You Know?

Quick Brand Facts

Youngistaan loves it. 200 million people

Quick Brand Facts

xiii. Quaker Oats

Quaker Oats Benefits

Quick Brand Facts

Quick Brand Facts

xvi. Uncle Chipps

Quick Brand Facts

V. The Environment in Which PEPSICO Operate

VI. Accelerated the Benefits of One PepsiCo

VII. Aggressively Building New Capabilities

Meeting Consumer Demand

Research & Development

VIII. Strengthening a Second-to-None Team and Culture

Growing the number of women leaders

Taking a stand for equality

Recruiting veterans to our company

Honoring Pepsico Associates

You might also like