Corporate Profiles - 2020 - 102

COMPANY OVERVIEW

PepsiCo, Inc.
Stepping up investments in energy drinks and e-commerce
nergy drinks and e-commerce are growth
avenues for PepsiCo, Inc., Purchase, NY.
The company made two energy drink
transactions during the year while the coronavirus (COVID-19) accelerated e-commerce plans.
PepsiCo in March entered into an agreement
to acquire Rockstar Energy Beverages for $3.85
billion.
"Over time, we expect to capture our fair
share of this fast-growing, highly profitable category and create meaningful new partnerships
in the energy space," said Ramon L. Laguarta,
chairman and chief executive officer.
Then in April, PepsiCo entered into an agreement with Vital Pharmaceuticals, Inc. to distribute the Bang Energy drink portfolio in the
United States. Mr. Laguarta, when speaking in
a July 13 earnings call, gave PepsiCo's energy
drink strategy: accelerate the performance of
Rockstar, expand the distribution of Bang and
improve execution in the marketplace, and expand Mountain Dew in the energy category.
After COVID-19 hit in March, PepsiCo in May
launched two direct-to-consumer e-commerce
platforms in PantryShop.com and Snacks.com.
"Whoever wins in e-commerce now and is
able to capture those families that are trying
this e-grocery service for the first time, I think,

E

is going to win those families in the future," Mr.
Laguarta said in the July 13 earnings call.
COVID-19 has people turning to brands they
trust, which should benefit PepsiCo, he said.
"And we have quite a lot in many markets that
consumers trust," Mr. Laguarta said. "There's big
brands that have been around for some time.
We've modernized them. We've kept them relevant to the consumer."
PepsiCo has declined to give a 2020 financial outlook because of uncertainty caused by
COVID-19. The company in the second quarter
recorded $400 million of incremental costs related to keeping employees safe and ensuring
business continuity.
The pandemic also affected the company's
North America Beverages unit. Organic revenue
declined 7% in the second quarter as declines in
the convenience and gas and foodservice channels more than offset growth in other channels.

Other units fared better. Net revenues over the
first six months of the fiscal year rose 7% to $8.35
billion for Frito-Lay North America and 14% to
$1.3 billion for Quaker Foods North America.
"Consumer eating habits continued to evolve,
with consumers spending more time at home,
which benefits the at-home breakfast, snacking
and dinner occasions," Mr. Laguarta said.
PepsiCo, Inc.'s Frito-Lay division plans to invest $200 million to expand operations at its
snack manufacturing plant in Houston County,
Ga. The expansion includes an additional line to
produce tortilla chip products, another line to
make Baked Cheetos Puffs, space for a future
manufacturing line and a warehouse building to
support the new manufacturing lines.
PepsiCo in June announced it will retire the
Aunt Jemima brand due to its origins in racist
imagery. The image of a black woman will be removed from the brand's pancake mixes, syrups
and other products, the company said.
In August, the company created a new position, executive vice president and chief corporate
affairs officer. Roberto Azevêdo, director-general
of the World Trade Organization, took over the
role, which brings PepsiCo's public policy, government affairs and communications activities
under one umbrella. CP

Chief executive officer -
Ramon L. Laguarta

PepsiCo net revenue

PepsiCo net income

PepsiCo share price
$152

$4,857

$12,515

$7,314

in millions

in millions

$137
$122
$63,525

$64,661

$67,161

2017

2018

2019

$107
$92

2017

102 \ October 2020

2018

2019

Oct. Dec.
2019

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Feb.
2020

Apr.

June

Aug.

Corporate Profiles


http://www.PantryShop.com http://www.Snacks.com

Corporate Profiles - 2020

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