Milling & Baking News Corporate Profiles - 2019 - 104

COMPANY OVERVIEW

PepsiCo, Inc.
Gatorade and Frito-Lay fuel top-line growth
xecutives of PepsiCo, Inc., Purchase, N.Y.,
in February emphasized a goal of accelerating top-line growth in 2019. Growth
was evident, particularly in the Gatorade and
Frito-Lay brands, after the third quarter ended
on Sept. 7.
"PepsiCo's performance today gives us confidence that the strategy we laid out in February
to become faster, stronger and better is working," Ramon L. Laguarta, chairman and chief
executive officer, said in an Oct. 3 earnings call
to discuss third-quarter results. "Importantly,
we're balancing our investments to both drive
results in the short term and position our business for sustained long-term performance.
"Becoming faster is about winning in the
marketplace, being more consumer-centric and
accelerated investment for top-line growth. For
example, we've increased our investment in advertising and marketing by 12% year to date."
PepsiCo on the New York Stock Exchange
opened the calendar year at $109.15 per share.
The price had risen to $137.17 per share by
Oct. 31. PepsiCo executives expected to reach a
full-year organic revenue growth target of 4%.
The company had net revenue of $46,521 million after three quarters, up 3.1% from $45,137
million in the same time of the previous year.

Frito-Lay North America revenue grew 5.5%
in the third quarter.
"Importantly, the business is not only growing but winning in the marketplace versus competition," Mr. Laguarta said.
Innovation injected energy into the Gatorade brand. Gatorade Zero, a calorie-free drink,
surpassed $500 million in retail sales after its
May 2018 launch. Under the Gatorade brand,
PepsiCo in July of this year launched Bolt24, a
beverage positioned for athletes off the field,
and planned to expand the Bolt24 portfolio
in 2020.
"Obviously, we reserve the right to have a
Zero Bolt24 going forward," Mr. Laguarta said.
Mountain Dew will be a focus in 2020.
"Mountain Dew is improving, but it's not
to the levels that we would like to see," Mr.
Laguarta said. "So that's the focus of the team
for the next few quarters, make sure that we

get Dew back to what we think is a more sustainable performance."
Management changes occurred in 2019. Steven Williams, formerly senior vice-president and
chief commercial officer for Frito-Lay's U.S. operations, was appointed c.e.o. of PepsiCo Foods
North America, which includes Frito-Lay North
America and Quaker Foods North America. Ram
Krishnan, formerly c.e.o. of Greater China, was
named global chief commercial officer.
Investments came in several international
regions.
PepsiCo in July acquired a stake in Natural
Food International Holding Ltd., a natural foods
company based in Shenzhen, China, in a transaction valued at $131 million. The same month
PepsiCo agreed to acquire all the outstanding
shares of Pioneer Foods Group Ltd. for $1.7
billion. The South African-based company is
active in cereals, juices and other African nutritional food staples.
In Mexico, PepsiCo plans to invest $4 billion
between 2019 and 2020 in four areas: developing a single agricultural model that benefits
the production chain, strengthening infrastructure to maximize production capacity, developing a strong sustainability agency, and promoting community development. CP

Chief executive officer -
Ramon L. Laguarta

PepsiCo net income

PepsiCo net revenue

PepsiCo share price

per share
$142

$6,329

2016

104 \ November 2019

$4,857

2017

$12,515

2018

in millions

$132
$122

$62,799

$63,525

$64,661

2016

2017

2018

$112
$102
Oct.
2018

Dec.

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Milling & Baking News Corporate Profiles - 2019

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