PEPSICO INC. SWOT ANALYSIS 2017

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ABOUT PEPSICOName PepsiCo Inc.

Logo

Industries served• Beverage (Pepsi, Mountain Dew, Gatorade, Sierra Mist)• Food (Quaker Oats, WBD, Rold Gold)• Snack (Lay’s, Doritos, Cheetos)

Geographic areas served Worldwide (more than 200 countries)Headquarters Purchase, New York, U.S.Current CEO Indra Nooyi

Revenue US$63.056 billion (2015) decreased 5.4% over US$66.683 billion (2014)

Profit US$5.452 billion (2015) decreased 16.3% over US$6.516 billion (2014)

Employees 263,000 (2016)

Main Competitors

The Coca-Cola Company, DPSG, Mondelēz International, Monster Beverage Corporation, Hansen Natural Corporation, National Beverage Corp., Kraft Foods Group, The Kellogg Company, ConAgra Foods, Nestlé S.A., Snyder’s-Lance and other beverage, food and snack companies.

PepsiCo business overview from the company’s financial report:

“We are a leading global food and beverage company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.

Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of convenient and enjoyable beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories.

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BUSINESS DESCRIPTION (1/2)“ ”

Performance with Purpose is our goal to:

• deliver sustained value by providing a wide range of beverages, foods and snacks, from treats to healthy eats;

• finding innovative ways to minimize our impact on the environment and lower our costs through energy and water conservation as well as reduce our use of packaging material;

• providing a safe and inclusive workplace for our employees globally;

• respecting, supporting and investing in the local communities in which we operate.”[1]

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BUSINESS DESCRIPTION (2/2)“ ”

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STRENGTHS

1. Comprehensive product portfolio with more than 100 brands serving nearly every niche in the beverage, food and snack industries

S WO T

PepsiCo sells more than 100 different snack and

beverage brands

PepsiCo Nestlé S.A. Coca-Cola Mondelēz Kraft Foods0

100

200

300

400

500

600

700

800

Figure 1. Brand portfolio by world’s largest food and beverage companies

Source: The respective companies’ official websites and financial reports [1][2][3][4][5]

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STRENGTHSS WO T

The company owns 22 brands, which earn at

least US$1 billion a year

Pepsi-ColaLay's

Mountain DewGatoradeTropicanaDiet Pepsi

7UPDoritos

Quaker FoodsCheetosMirinda

Lipton RTD TeasRuffles

TostitosAquafina

Pepsi MAXBrisk

Sierra MistFritos

Diet Mountain DewStarbucks RTD Beverages

Walkers

0 5 10 15 20 25

22

9

7.5

7.3

6.1

5.65

4.8

4.4

3.5

3.25

3.2

3.05

2.75

2.55

2.1

1.75

1.4

1.4

1.4

1.4

1.1

1.1

Figure 2. PepsiCo’s top earning brands (in US$ billions)

Source: PepsiCo financial report 2011 [6]

1. Overdependence on sales to Wal-Mart stores and other retailers

• PepsiCo’s sales to Wal-Mart Stores, Inc. was US$8.2 billion, or 13% of PepsiCo’s total net revenue.

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WEAKNESSESS WO T

2012 2013 2014 2015

Sales % of total Sales % of total Sales % of total Sales % of total

7.2 billion 11% 7.3 billion 11% 8 billion 12% 8.2 billion 13%

Figure 6. PepsiCo US$ dollar sales to Wal-Mart and the corresponding percentage of total PepsiCo revenue

Source: PepsiCo financial report[1]

1. Growing alcoholic beverage industry

• The alcoholic beverage market has been steadily growing since 2009.

• In 2017, the market is expected to reach a value of US$1.319 trillion.

• PepsiCo could expand into the alcoholic beverages industry by acquiring some established successful brands in a market.

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OPPORTUNITIESS WO T

1. Concerns over obesity and potentially dangerous substances may reduce the demand for some of the company’s products

PepsiCo emphasizes this threat in its financial report:

“Our success depends on our ability to anticipate and effectively respond to shifts in consumer trends, including increased demand for products that meet the needs of consumers who are concerned with health and wellness; our ability to develop or acquire new products that are responsive to certain consumer preferences, including reducing sodium, added sugars and saturated fat”[1]

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THREATSS WO T

“ ”

1. PepsiCo Inc. (2016). Form 10-K for the Fiscal Year Ended December 26, 2015. Available at: http://www.pepsico.com/docs/album/annual-reports/pepsico-2015-annual-report_final_s57dqszgmy22ggn.pdf?sfvrsn=0 Accessed January 8, 2017

2. Nestlé S.A. (2016). Brands A-Z. Available at: http://www.nestle.com/Brands/BrandsSearchList?char=A Accessed January 8, 2017

3. The Coca-Cola Company (2016). All Brands. Available at: http://www.coca-colacompany.com/brands/all/ Accessed January 8, 2017

4. Mondelēz International (2016). Brand Family. Available at: http://www.mondelezinternational.com/brand-family Accessed January 8, 2017

5. Kraft Foods Group (2016). Our Brands. Available at: http://www.kraftfoodsgroup.com/brands/index.aspx Accessed January 8, 2017

6. PepsiCo Inc. (2012). Form 10-K for the Fiscal Year Ended December 27, 2011. Available at: http://www.pepsico.com/docs/album/annual-reports/PEP_AR11_2011_Annual_Report.pdf Accessed January 8, 2017

7. Interbrand (2016). Best Global Brands 2015. Available at: http://bestglobalbrands.com/2015/ranking/ Accessed January 8, 2017

8. Forbes (2016). The World’s Most Valuable Brands. Available at: http://www.forbes.com/powerful-brands/list/ Accessed January 8, 2017

9. Culliney, K. (2014). Competing with PepsiCo: How to be a top 10 snack player. Available at: http://www.bakeryandsnacks.com/Manufacturers/Competing-with-PepsiCo-How-to-be-a-top-10-snack-player Accessed January 8, 2017

10. Nestlé S.A. (2016). Financial Statements 2015. Available at: http://www.nestle.com/asset-library/documents/library/documents/financial_statements/2015-financial-statements-en.pdf Accessed January 8, 2017

11. Mondelēz International, Inc. (2016). Form 10-K for the Fiscal Year Ended December 31, 2015. Available at: http://ir.mondelezinternational.com/secfiling.cfm?filingID=1193125-16-469394&CIK=1103982 Accessed January 8, 2017

12. The Coca-Cola Company (2016). Form 10-K for the Fiscal Year Ended December 31, 2015. Available at: http://www.coca-colacompany.com/investors/investors-info-sec-filings/ Accessed January 8, 2017

13. Food Business News (2015). PepsiCo taps into health. Available at: http://www.foodbusinessnews.net/articles/news_home/Business_News/2015/02/PepsiCo_taps_into_health.aspx?ID=%7B11FB2637-01C2-4D56-8901-94E55510E5F9%7D&cck=1 Accessed January 8, 2017

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SOURCES (1/2)

14. Dr Pepper Snapple Group, Inc. (2016). Form 10-K for the Fiscal Year Ended December 31, 2015. Available at: http://investor.drpeppersnapplegroup.com/annual-reports Accessed January 8, 2017

15. PepsiCo, Inc. (2016). BRIEF HISTORY OF PEPSICO'S BEVERAGES. Available at: https://www.pepsicobeveragefacts.com/home/timeline Accessed January 8, 2017

16. Business Wire (2015). Starbucks and PepsiCo to Accelerate Growth within Latin America’s $4 Billion Ready-to-Drink Coffee and Energy Beverage Categories. Available at: http://www.businesswire.com/news/home/20150723006542/en/Starbucks-PepsiCo-Accelerate-Growth-Latin-America%E2%80%99s-4#.VfbGWRGqqkp Accessed January 8, 2017

17. Beverage Marketing Corporation (2016). Press Release: The U.S. Liquid Refreshment Beverage Marketing Accelerated in 2015, Reports Beverage Marketing Corporation. Available at: http://www.beveragemarketing.com/news-detail.asp?id=335 Accessed January 8, 2017

18. MarketLine (2014). Global Alcoholic Drinks Industry Profile. Accessed January 8, 201719. Beverage Marketing Corporation (2013). Press Release: The U.S. Liquid Refreshment Beverage Market Grew by 1.0% in 2012, Reports

BMC. Available at: http://www.beveragemarketing.com/news-detail.asp?id=255 Accessed January 8, 201720. Beverage Marketing Corporation (2014). Press Release: The U.S. Liquid Refreshment Beverage Market Remained Flat in 2013.

Available at: http://www.beveragemarketing.com/news-detail.asp?id=299 Accessed January 8, 201721. Beverage Marketing Corporation (2015). Press Release: The U.S. Liquid Refreshment Beverage Marketing Enlarged in 2014, Reports

Beverage Marketing Corporation. Available at: http://www.beveragemarketing.com/news-detail.asp?id=335 Accessed January 8, 201722. Beverage Industry (2013). 2013 State of the Industry: Tea & RTD tea. Available at: http://www.bevindustry.com/articles/86554-state-of-

the-industry-tea-rtd-tea?v=preview Accessed January 8, 201723. Beverage Industry (2014). 2014 State of the Industry: Tea and RTD tea. Available at: http://www.bevindustry.com/articles/87613-state-

of-the-industry-tea-and-rtd-tea?v=preview Accessed January 8, 201724. Beverage Industry (2015). 2015 State of the Beverage Industry: Health and wellness trends drive tea sales. Available at:

http://www.bevindustry.com/articles/88566-state-of-the-beverage-industry-health-and-wellness-trends-drive-tea-sales Accessed January 8, 2017

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SOURCES (2/2)

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