PepsiCo

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PepsiCo, Inc.
Company typePublic (NYSE: PEP)
IndustryFood and beverage
Founded1965
HeadquartersPurchase, New York, USA
Key people
Steve Reinemund, Chairman
Indra Nooyi, President & CEO
ProductsPepsi
Gatorade
Lay's
Doritos
Frappuccino (for Starbucks)
RevenueIncrease $32.6 billion USD (2005)
Increase $5.9 billion USD (2005)
Increase $4.5 billion USD (2005)
Total assets92,377,000,000 United States dollar (2021) Edit this on Wikidata
Number of employees
153,000 (2005)
Websitewww.pepsico.com

PepsiCo, Inc. NYSE: PEP is a global American beverage and snack company. The company manufactures, markets and sells a variety of carbonated and non-carbonated beverages as well as salty, sweet and grain-based snacks, and other foods. Besides the Pepsi-Cola brands (including Mountain Dew), the company manufactures Quaker Oats, Gatorade, Frito-Lay and Tropicana. In many ways, PepsiCo differs from its competitor The Coca-Cola Company, having almost three times as many employees, larger revenues, but a smaller net profit (See comparison at Yahoo Finance). The company formed for distribution and bottling is The Pepsi Bottling Group NYSE: PBG. PepsiCo is a SIC 2080 (beverage) company.

History

Headquartered in Purchase, New York, The Pepsi Cola Company began in 1898, but it only became known as PepsiCo when it merged with Frito Lay in 1965. Until 1997, it also owned Kentucky Fried Chicken, Pizza Hut, and Taco Bell, but these fast-food restaurants were spun off into Tricon Global Restaurants, now Yum! Brands, Inc. PepsiCo purchased Tropicana in 1998, and Quaker Oats in 2001.

Corporate governance

Current members of the board of directors of PepsiCo are: John Akers, Robert E. Allen, Dina Dublon, Victor Dzau, Ray Hunt, Alberto Ibargüen, Arthur Martinez, Indra Nooyi, Steven Reinemund, Sharon Rockefeller, James Schiro, Franklin Thomas, Cynthia Trudell, and River King.

Steve Reinemund is chief executive officer. On August 14, 2006 Chief Financial Officer and President Indra Krishnamurthy Nooyi was named the next to succeed Reinemund, who at 58 will retire on October 1.

Mike White is the President of PepsiCo International Division. Some analysts predict after the appointment of Ms. Indra Nooyi, Mike White may choose to leave PepsiCo. The departure is expected by some to be after mid 2007 when Mr. White is eligible for a 7-figure payout.[citation needed]

Former top executives at PepsiCo

PepsiCo brands

PepsiCo owns five different billion-dollar brands. These are Pepsi, Tropicana, Lay's, Doritos, and Gatorade. The company owns many other brands as well.

Partnerships

PepsiCo also has formed partnerships with several brands it does not own, in order to distribute these or market them with its own brands.

Discontinued lines

  • All Sport: a line of sports drinks. All-Sport was lightly carbonated; in contrast, rivals Gatorade and Coke-owned POWERade were non-carbonated. The 2001 purchase of Quaker Oats (in effect acquiring Gatorade) made All Sport expendable, and the brand was sold to another company.
  • Crystal Pepsi, a clear version of Pepsi-Cola.
  • FruitWorks: Flavors were Strawberry Melon, Peach Papaya, Tangerine Citrus, Apple Raspberry, and Pink Lemonade. Two other flavors, Passion Orange and Guava Berry, were available in Hawaii only.
  • Josta: launched 1995, "with Guarana," the first energy drink launched by a major soft drink company in the US.
  • Pepsi Kona: launched 1997, a coffee-flavored version of Pepsi-Cola.
  • Matika: Run in August 2001, it was a tea/juice alternative beverage, sweetened with Cane Sugar & containing Ginseng. Dragonfruit Potion, Magic Mombin, Mythical Mango, Rising Starfruit, Skyhigh Berry
  • Mazagran: launched 1995
  • Mr. Green (Sobe)
  • Patio: line of flavored drinks (1960-late '70s)
  • Pepsi Edge, a mid-calorie version of Pepsi-Cola.
  • Pepsi Blue, a berry-flavored, blue version of Pepsi-Cola.
  • Slice, a line of fruit-flavored carbonated soft drinks.
  • Smooth Moos: launched 1995, a flavored milk-based drink.
  • Storm: launched March 15, 1998, replaced by Sierra Mist.

Former brands

PepsiCo owned a number of restaurant chains until it exited that business in 1997, selling some, and spinning off others into a new company Tricon Global Restaurants, now known as Yum! Brands, Inc.). PepsiCo also previously owned several other brands that it later sold.

Praise

Diversity

PepsiCo received a 100 percent rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2004, the third year of the report.

Tampering

During the summer of 1993, PepsiCo managed to stave off a runaway hoax pertaining to alleged product tampering. Syringes were claimed to have been found in cans of Diet Pepsi -- first in Seattle, then throughout the U.S. over the next few days. With the arrests of several of the fraudulent claimants, reports of found hypodermic needles ceased. PepsiCo's subsequent handling of the situation via carefully-worded press releases and VNRs is frequently cited as a textbook example of how exactly to handle falsely spread rumors about a company.[1]

Criticisms

PepsiCo in India

A woman waking up on a sidewalk in Bijapur, India, under a Pepsi advertisement.

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use of foreign brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994. [1] Others claim that firstly Pepsi was banned from import in India, in 1970, for having refused to release the list of its ingredients and in 1993, the ban was lifted, with Pepsi arriving on the market shortly afterwards. These controversies are a reminder of "India's sometimes acrimonious relationship with huge multinational companies." Indeed, some argue that PepsiCo and The Coca-Cola Company have "been major targets in part because they are well-known foreign companies that draw plenty of attention." [2]

In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in New Dehli, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and The Coca-Cola Company, contained toxins including lindane, DDT, malathion and chlorpyrifos — pesticides that can contribute to cancer, a breakdown of the immune system and cause birth defects. Tested products included Coke, Pepsi, 7 Up, Mirinda, Fanta, Thums Up, Limca, and Sprite. CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca Cola's 30 times. [3]CSE said it had tested the same products in the US and found no such residues. However, this was the European standard for water, not for other drinks. No law bans the presence of pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. But an Indian parliamentary committee, in 2004, backed up CSE's findings and a government-appointed committee is now trying to develop the world's first pesticide standards for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks. On December 7, 2004, India's Supreme Court ruled that both PepsiCo and competitor The Coca-Cola Company must label all cans and bottles of the respective soft drinks with a consumer warning after tests showed unacceptable levels of residual pesticides.[citation needed]

Both companies continue to maintain that their products meet all international safety standards without yet implementing the Supreme Court ruling.[citation needed] As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market share of soft-drink sales in India. [4] PepsiCo has also been alleged to practice "water piracy" due to its role in exploitation of ground water resources resulting in scarcity of drinking water for the natives of Puthussery panchayat in the Palakkad district in Kerala, India. Local residents have been pressuring the government to close down the PepsiCo unit in the village.

In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company maintain that their drinks are safe for consumption and have published newspaper advertisements that say pesticide levels in their products are less than those in other foods such as tea, fruit and dairy products.[5] In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft drinks, has been banned.[6] Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals.[7]

PepsiCo in Burma

From 1991 until 1997 PepsiCo was one of the most notable companies to do business in Burma. PepsiCo's business partner, Thein Tun, was a noted business partner of the ruling Burmese military junta, which has been alleged to be responsible for some of the worst human rights violations in the world.

PepsiCo's involvement prompted one of the biggest Burma-related boycotts in history. The campaign was on a par with those against Texaco and Unocal, running around the same time, and currently against Total Oil.

PepsiCo formally began their investment in Burma in November 1991 when they opened a bottling plant in the then-capital Rangoon, despite the call by Aung San Suu Kyi and the National League for Democracy for companies to avoid doing business in Burma until it returned to democracy. The campaign against Pepsi was initiated by the Asian-based Burma Rights Movement for Action. The campaign later gained growing strength in the West as Burmese human rights groups focused on campaigns against companies in Burma, including the oil giants Texaco, Unocal, Amoco, and Petro-Canada.

When Petro-Canada left Burma, Canadian and U.S. based Burmese democracy groups sharpened their focus on PepsiCo. The campaign received a massive boost when, in 1996, the Free Burma Coalition took the lead in forcing Pepsi out of American universities. This included the scrapping of a multi-million dollar deal at Harvard.

The campaign also spread to Europe where the UK-based organization, Third World First, adopted the boycott. In response, in 1996, PepsiCo attempted to step out of the spotlight by selling its share of its Burmese joint venture to its partner but retaining its Burmese franchise agreement. Aung Sung Suu Kyi responded "As far as we are concerned, Pepsi[Co] has not divested from Burma" and both human rights and environmental groups continued the pressure on Pepsi. Eventually, with the Burmese regime holding violent anti-democracy rallies and pressure from around the world mounting, PepsiCo announced in January 1997 that it would cut all ties with Burma. However, to this day, PepsiCo has not admitted that it was morally wrong to invest in Burma as some other companies have upon leaving the country. Pepsi boycott history

Pepsi and bullfighting

In 1999, PepsiCo received criticism from animal rights activists for advertising in stadiums used for bullfighting.[8]

Notes and references

  1. ^ "Coca-Cola India", Jennifer Kaye, Tuck School of Business at Dartmouth, 2004 (PDF)
  2. ^ "Coke, Pepsi lose fight over labels", Knight Ridder News, 9 December 2004
  3. ^ "Indian Coke, Pepsi Laced with Pesticides, Says NGO", Inter Press Service, August 5, 2003
  4. ^ "How a Global Web of Activists Gives Coke Problems in India", Wall Street Journal, July 7 2005
  5. ^ Cola sales down 10% on state bans
  6. ^ Kerala bans Coke and Pepsi
  7. ^ Indian state bans Pepsi and Coke
  8. ^ Animal Rights group sees red over Pepsi bullring ads
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