PepsiCo: Wikis


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  • opera singer Rosemary Kuhlmann was an assistant to the international vice-president of PepsiCo for 16 years from the age of 56, despite intending to stay for only four months?

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From Wikipedia, the free encyclopedia

Type Public (NYSEPEP)
Founded New Bern N.C, U.S. (1890)
Founder(s) Caleb Bradham, Donald M. Kendall and Herman W. Lay
Headquarters Purchase, New York, U.S.
Area served Worldwide
Industry Food
Non-alcoholic beverage
Products Pepsi
Diet Pepsi
Mountain Dew
AMP Energy
Sierra Mist
Starbucks Frappuccino
Lipton Iced Tea
Tropicana Products
Naked Juice
Propel Fitness Water
Quaker Oats Company
Rold Gold
Revenue US$43.2 Billion (FY 2009)[1]
Operating income US$8.04 Billion (FY 2009)[1]
Net income US$5.95 Billion (FY 2009)[1]
Total assets US$39.8 Billion (FY 2009)[2]
Total equity US$16.8 Billion (FY 2009)[2]
Employees 185,000(2008)
Divisions PepsiCo Americas (PepsiCo Ameri Food, PepsiCo Americas Beverages), PepsiCo International

PepsiCo, Incorporated (NYSEPEP) is a Fortune 500, American multinational corporation headquartered in Purchase, NY with interests in manufacturing and marketing a wide variety of carbonated and non-carbonated beverages, as well as salty, sweet and grain-based snacks, and other foods. Their main product Pepsi, a cola sells over 100 billion cans a year.[citation needed] Besides the Pepsi-Cola brands, the company owns the brands Quaker Oats, Gatorade, Frito-Lay, SoBe, Naked, Tropicana, Copella, Mountain Dew, Mirinda and 7-Up (outside the USA).

Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006. During her time, healthier snacks have been marketed and the company is striving for a net-zero impact on the environment.[3] This focus on healthier foods and lifestyles is part of Nooyi's "Performance With Purpose" philosophy.

Today, beverage distribution and bottling is undertaken primarily by associated companies such as The Pepsi Bottling Group (NYSEPBG) and Pepsi Americas (NYSEPAS). PepsiCo is a SIC 2080 (beverage) company.



Headquartered in Purchase, New York, with Research and Development Headquarters in Valhalla, The Pepsi Cola Company began in 1898 by a NC Pharmacist and Industrialist Caleb Bradham, but it only became known as PepsiCo when it merged with Frito Lay in 1965. Until 1997, it also owned KFC, 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. In December 2005, PepsiCo surpassed Coca-Cola Company in market value for the first time in 112 years since both companies began to compete.[2]

Corporate governance

Pepsi-Cola Venezuela

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

On October 1, 2006, former Chief Financial Officer and President Indra Nooyi replaced Steve Reinemund as chief executive officer. Nooyi remains the corporation's president, and became Chairman of the Board in May 2007.

Mike White is the President of Pepsi-Co International Division.

Former top executives at PepsiCo


In the US, working with its competitor Coca Cola Company, PepsiCo is a major lobbying force working to gain favorable legislation for the beverage industry. In 2005, PepsiCo spent $740,000 on lobbying, in 2006, $880,318, in 2007, $1 million, and in 2008, $1,176,000. In 2009, lobbying expenses rose to $4.2 million or nearly a 300 percent increase. Much of the increased lobbying expenses are due to the industry’s fight against increased taxes on soft drinks.[4] For 2009, PepsiCo has 31 lobbyists at 8 different firms lobbying on its behalf.[5]

PepsiCo brands

PepsiCo owns 5 different billion-dollar brands. These are Pepsi, Tropicana, Frito-Lay, Quaker, and Gatorade. The company owns many other brands as well.

In 2007, Nooyi spent $1.3 billion on healthier-alternative brands like Naked Juice, a California maker of soy drinks and organic juice.

Pepsico has also recently acquired a 50% stake in U.S.-based Sabra Dipping Company.[6]


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.
  • Aspen Soda, an apple-flavored soft drink (late 1970s-early 80's)
  • 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.
  • 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 (soda): 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.
  • Pepsi Kona: launched 1997, a coffee-flavored version of Pepsi-Cola.
  • Smooth Moos: launched 1995, a flavored milk-based drink.
  • Storm: launched March 15, 1998, replaced by Sierra Mist.
  • Miranda Lime: Launched in the second half of the 1990 decade(in India) but failed

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.


PepsiCo received a 100 percent rating on the Corporate Equality Index released by the LGBT-advocate group Human Rights Campaign starting in 2004, the third year of the report.[7]


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. By June 15, 1993, consumers reported finding a bullet, pins and screws in their Diet Pepsi. 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.[8]


PepsiCo in India

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.[9] 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." [10]

In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in New Delhi, 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 chlorpyrifospesticides 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.[11] 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 pesticides 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.

As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market share of soft-drink sales in India.[12] PepsiCo has also been accused by the Puthussery panchayat in the Palakkad district in Kerala, India, of practicing "water piracy" due to its role in exploitation of ground water resources resulting in scarcity of drinking water for the panchayat's residents, who have been pressuring the government to close down the PepsiCo unit in the village.[13]

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.[14] In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft drinks, was banned by the state government in 2006[15], but this was reversed by the Kerala High Court merely a month later.[16] Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals.[17]

Pesticide residuals controversy


• August 6, 2003 – The Delhi based Center for Science and Environment (CSE) reveals that it has conducted a study on samples of 12 major soft drink brands sold in the country for the residual levels of pesticides and found the levels to be far too high when compared with the same in the samples from developed countries.

• August 6, 2003 – Both the Cola giants join hands when faced with adversity. The PepsiCo India holding chairman Rajiv Bakshi assures that the company’s products are of highest quality and conform to very stringent standards set by “independent accredited laboratories”. He expresses the opinion that the company is open for inspection by “an independent accredited authority comprising experienced people”

• August 7, 2003 – Pepsi India comes up with a press release stating that all Pepsi products conform to the most stringent of quality standards world over. The regular testing and stringency norms at Pepsi, it seems, require the most sophisticated and specialized tests and equipment to be able to detect the pesticide residue at 0.1 parts per billion levels. Moreover, CSE is not a government accredited body certified for the capability of carrying any such tests, says the press release. The press release also cites the name of “an independent world-class laboratory” – VIMTA, which was accredited by the National Accreditation Board for Testing & Calibration for Laboratories (NABL), as having tested the Pepsi products against several stringent norms. Mutual mudslinging begins as the company openly questions the credibility of the tests done by CSE and its capability in conducting such tests.

• August 10, 2003 – While the Cola giants stick to their story of CSE’s claims to be incorrect, CSE reiterates that the soft drink majors follow double standards with the samples from US containing no pesticides, whereas the samples from Indian plants contain 30 to 35 times more than the acceptable levels of pesticide residues stipulated by European Economic Community (EEC). The Cola giants start contemplating legal action in the wake of steep fall in sales.

• August 22, 2003 – Union Health minister Sushma Swaraj issues statement that only three samples out of the 12 in the contention meet the EEC norms; while the other samples have residue levels above the acceptable limits, they are only 2 to 6 times more than the acceptable level unlike 30 to 35 times as claimed by the CSE; This has been the result of tests conducted by two laboratories, the Mysore-based Central Food Technological Research Institute (CFTRI) and the Kolkata-based Central Food Laboratory (CFL).

• August 23, 2003 – The government appoints a 15-member all party Joint Parliamentary Committee under the leadership of Sharad Pawar to delve into the issue and submit a report on the same in the next session. The committee is also expected to suggest the safety standards for pesticide residue levels in soft drinks, fruit juices and other beverages that have water as the main ingredient.

• February 2004 – The JPC submits its report to the parliament, saying that the tests conducted by CSE are accurate and India needs to come up with a set of standards for carbonated beverages. Central Committee on Food Standards (CCFS) endorses the JPC report and says it will set final standards. Bureau of Indian Standards (BIS) also starts revising its standards.

• June 2004 – Pesticide Residue Sub-Committee of CCFS meets and decides to do year-long monitoring.

• November 2004 – CCFS meets and decides to set up National Expert Committee to study the matter.

• August 8, 2006 – Four states – Gujarat, Madhya Pradesh, Rajasthan and Chattisgarh ban the sale of Coke and Pepsi in the educational and governmental institutions. The ban is a consequence of CSE’s report stating that even now, the pesticide levels in these drinks are more than 24 times above the limits set by BIS. While the top management of both the companies insists that their products adhere to the most stringent norms and are safe for consumption, CSE toughens its stand that the Cola companies are misleading the general public and have a long way to go before actually meeting those safety norms.

• August 10, 2006 – Kerala announces a complete ban on production and sale of carbonated soft drinks, including Coca-Cola and Pepsi, while Karnataka announces a ban on sale of colas in schools and state-run hospitals.

• August 14, 2006 – PepsiCo India Chairman Rajeev Bakshi reiterates that the company’s products in India are as safe as anywhere else in the world. He expresses the company’s willingness to support the government in setting up criteria for pesticide residues in soft drinks, but insists that a protocol for testing has to be developed, which is not to stall notification of BIS norms, but a measure to ensure that the testing procedure is validated by series of labs in India and the world over.

• August 22, 2006 – The expert committee constituted by union health minister Anubumani Ramadoss quashes the CSE’s report on pesticide residue levels stating that the experiment methodology has lot of flaws in it right from sampling to reporting the residue levels.

• September 22, 2006 – The Kerala High Court quashes the government’s ban on production and sale of the Colas in the state. The state government is exploring other alternatives.

• January 10, 2007 – Pepsi India Holding chairman Rajeev Bakshi exits Indian operations.

• February 16, 2007 – The apex court accepts the appeal of Kerala state government against the High Court judgment quashing the ban on production and sale of Coca-Cola and Pepsi in the state.

Matter of contention

The presence of pesticide residues in the samples of soft drinks manufactured and distributed in India by the Pepsi India holding company are at levels greater than those present in the samples of similar products in US and Europe. Each of the three major parties involved, i.e., The Cola companies, CSE and the government, differ on what is acceptable standard for the pesticide residue levels in the soft drinks. While the Cola companies contend that their products in India are as safe as they are elsewhere, CSE is particular about the fact that the pesticides present in the soft drinks are carcinogenic in nature and the Cola companies are apathetic about this fact. The government neither cracked the whip on the Cola companies, nor did it play dumb spectator. The government says that while it is true that the residue levels of pesticides in soft drinks are above the EEC norms, they are not as high as those values reported by CSE. The matter has led to contemplation of setting criteria for the standard levels of pesticide residues in non-alcoholic beverages in India. The issue is alive for the past three years and no specific measures have come out till now in this regard.

Soft drinks market in India

India is one of the top five markets in terms of growth of the soft drinks market. The per capita consumption of soft drinks in the country is estimated to be around 6 bottles per annum in the year 2003. It is very low compared to the corresponding figures in US (600+ bottles per annum). But being one of the fastest growing markets and by the sheer volumes, India is a promising market for soft drinks.

The major players in the soft drinks market in India are PepsiCo and Coca-Cola Co, like elsewhere in the world. Coca-Cola acquired a number of local brands like Limca, Gold Spot and Thums Up when it entered Indian market for the second time. Pepsi Co’s soft drink portfolio also consists of Miranda and 7Up along with Pepsi. The market share of each of the company is more or less the same, though there is a conflict in the estimates quoted by different sources [18]

The major ingredient in a soft drink is water. It constitutes close to 90% of the soft drink content. Added to this, the drink also contains sweeteners, Carbon dioxide, Citric Acid/Malic acid, Colors, Preservatives, Anti Oxidants and other emulsifying agents, etc.[18]

Consumption patterns in India

In Tier 1, 2 and 3 cities in India, 29% of Indian consumers report consuming carbonated beverages/soft drinks during a fixed time of the day suggesting consumption has become a routine part of their day, with most consumption taking place during the 'afternoon to evening' time period. Not surprisingly, consumption is highest in Tier I cities such as Mumbai, Delhi, Kolkata, Chennai, Hyderabad and Bangalore. The level of consumption is seen to increase with rising household incomes (with the exception of the highest income level) while decreasing with age.[19]

The Indian soft drinks market is not under any regulation. Prevention of Food adulteration act 1954 does not include soft drinks. None of the BIS standards that existed before August 2003 had any guidelines or set criteria for the residue levels of pesticides in the soft drinks. But different lie agencies have set standards for the residue levels of pesticides. The European Economic Community (EEC) sets the maximum admissible concentration of individual pesticides and related products in drinking water at 0.1 parts per billion to ensure that the toxicity is not dangerous to human beings. For a few pesticides like aldrin, dieldin and heptachlor epoxide the admissible limit is even more stringent, i.e., 0.03 parts per billion.[18]

Prices in India(updated in Feb 2010)

Until the late 90s drinks were bottled in 250ml reusable glass bottles. It then shifted to 300ml botles priced at 10/-. Then came the can model which with 350ml costing around 18/- INR. Later mini bottles of 200ml quantity became a huge success with each bottle costing 6/- which later dropped by a rupee. For family packs there was the 1.5 lt plastic pet bottle costing about 43/-. Then with competition from Coca-Cola the pet bottle resized to 2 lt for just 50/-. It was at this time the smaller pet bottle of 500ml hit the markets tagged with a price of 20/-. Later the quantity was increased to 600ml(mentioning a 20% extra-free) without any increase in the price. But, due to inflation, the 600ml pet bottle price has been revised to 22/- from mid 2009, with the 2lt pet bottle also being increased by 2/-(it is now 52/-).

PepsiCo in Burma

From 1991 until 1997, PepsiCo is 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.[20]

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 San 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.

PepsiCo in Israel

Until 1991 PepsiCo was not sold in Israel, for which it was criticised by many in the United States who believed it was supporting the Arab boycott of Israel. PepsiCo always denied this allegation, saying Israel was simply too small to support a franchise. As a result, the Israeli market was taken over by Pepsi's rival Coca Cola, and to this day Pepsi has a very small market share in Israel.[21][22]

Pepsi Bottlers

On August 4, 2009 PepsiCo announced that it had reached a final merging agreement with its two largest bottlers The Pepsi Bottling Group, Inc and PepsiAmericas, Inc both of which it had previously spun off in the 1990s. The total cost of the transaction is estimated at $7.8 billion.[23]

The merger was approved by shareholders of both bottling companies on February 17, 2010 and was completed on February 26, forming a new wholly-owned division of the PepsiCo North American Beverages unit, Pepsi Beverages Company (PBC). Also included in the merger was a new agreement with the Dr Pepper Snapple Group in which PBC would soon be taking over the bottling and distribution of the Dr Pepper, Schweppes and Crush brands in all of the markets that were formerly served by PBG and PAS (along with those markets now served by PBC after its predecessors purchased the formerly independent bottlers that served those new markets since the announcement of the merger) through a 20-year licensing deal (PBC's predecessors have been bottling and distributing Crush in most of their markets since February 2009). The international operations of both former bottlers were transferred directly to the wholly separate PepsiCo International unit.

See also

Notes and references

  1. ^ a b c Pepsico (PEP) annual SEC income statement filing via Wikinvest
  2. ^ a b Pepsico (PEP) annual SEC balance sheet filing via Wikinvest
  3. ^ "The Pepsi Challenge". IUCN. 2008 - 2009. Retrieved March 25, 2008.. 
  4. ^ for Responsive Politics, Pepsi Co Inc,, Nov 20, 2009
  5. ^ Center for Responsive Politics, PepsiCo Inc, Nov 20, 2009
  6. ^ PepsiCo Buys 50% Stake in Sabra
  7. ^ Corporate Equality Index 2006
  8. ^ The Pepsi Product Tampering Scandal of 1993
  9. ^ "Coca-Cola India", Jennifer Kaye, Tuck School of Business at Dartmouth, 2004 (PDF)
  10. ^ "Coke, Pepsi lose fight over labels", Knight Ridder News, December 9, 2004
  11. ^ "Indian Coke, Pepsi Laced with Pesticides, Says NGO", Inter Press Service, August 5, 2003
  12. ^ "How a Global Web of Activists Gives Coke Problems in India", Wall Street Journal, July 7, 2005
  13. ^ "Pepsi gets reprieve in Kerala case", Rediff India Abroad, April 11, 2007
  14. ^ Cola sales down 10% on state bans
  15. ^ Sanjoy Majumder (2006-08-09). "Kerala bans Coke and Pepsi". BBC News. Retrieved 2008-01-03. 
  16. ^ K.C. Gopakumar (2006-09-23). "Kerala HC quashes ban on Coke and Pepsi". The Hindu BusinessLine. Retrieved 2008-01-03. 
  17. ^ Indian state bans Pepsi and Coke
  18. ^ a b c CSE Report: Analysis of pesticide residues in soft drinks, August 2006
  19. ^ Store-Bought Non Alcoholic Beverages in India, June 2009
  20. ^ "A Historical Look at the Pepsico/Burma Boycott " in Boycott Quarterly (Summer 1997), online at[1]
  21. ^ GETTING IN TEMPO WITH PEPSI COLA (Jerusalem Post, 1991)
  22. ^ Coca-Cola and Israel, March 13, 2007
  23. ^ "PepsiCo Reaches Merger Agreements with Pepsi Bottling Group and PepsiAmericas ", online at

External links

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