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Industry Analysis PepsiCo, Inc. is in the Food and Beverage industry. The U. S. food and beverage industry sector (SIC 20) is the nation's largest manufacturing sector at $ 321 billion and it is mature and developed. Additional growth in the food and beverage industry likely to come from overseas market and factors that will affect industry growth are population growth, economic conditions, and foreign trade patterns.
The top competitors within the industry are: - PepsiCo - Coca-Cola - Cadbury Schweppes - Kraft Foods The U. S. population is expanding by less than 1 percent annually, and immigrants constitute about one-fourth of this increase. The population is continuing to age as the size of U.
S. households shrinks. Current economic concerns cause spending restraint and prompt greater purchases of less costly private-label products and greater patronage of warehouse-club type operations. The trend toward smaller households with increasing numbers of single-person and one-parent households is expected to continue. The combination of an aging population characterized by decreasing household size and greater numbers of single-person and one-parent households indicate that total spending for food and beverages is likely to increase very slowly. More women work outside the home and a higher number of single-person households cause redistribution of the food and beverage dollar away from home and towards other outlays at the expense of the retail grocery industry where potential profits are higher.
In order to combat the aforementioned trends, food and beverage processors will be pressured to provide products tailored to older and single-person households to minimize the natural appeal of away-from-home eateries. As mentioned in the first paragraph, domestic market growth will be limited, thus manufacturers will likely compete very aggressively for market share and intensify export efforts to increase sales and enjoy high profits. Although there are lots of challenges, the food and beverage industry is very attractive industry due to following reason: The size of the industry is about $ 321 billion. If played smart, it could be very profitable for the companies involved. The industry is Global and opportunities exist throughout the world. There will always be demand for food and beverages.
Innovation and other alternatives (i. e. , non-carbonated drinks, healthy alternatives). Company Background PepsiCo, Inc. , incorporated in 1919, is a world leader in convenient foods and beverages, with revenues of about $ 27 billion and about 143, 000 employees. The company consists of the snack businesses of Frito-Lay North America (FLNA) and Frito-Lay International (FLI); the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products.
In addition, in January 2001, the Company completed the acquisition of the beverage business of South Beach Beverage Company, LLC (SoBe). SoBe manufactures and markets a line of alternative non-carbonated beverages, including fruit blends, energy drinks, dairy-based drinks, exotic teas and other beverages with herbal ingredients that are distributed under license by a network of independent distributors, primarily in the United States. PepsiCo brands are available in nearly 200 countries and territories. Its share of the US soft-drink market is about 32 % and Frito-Lay has about 58 % of the US snack-chip market. Snack Foods FLNA - The Company's domestic snack food business is conducted by Frito-Lay North America (FLNA). FLNA manufactures, markets, sells and distributes a varied line of salty and sweet snack foods throughout the United States and Canada, including Lay's and Ruffles brand potato chips, Doritos and Tostitos brand tortilla chips, Cheetos brand cheese-flavored snacks, Frito's brand corn chips, Road Gold brand pretzels, Wow!
brand low-fat and no-fat versions of potato and tortilla chips, Sun chips brand multi grain snacks, a variety of branded dips and salsas, Grandma's brand cookies and Cracker Jack brand candy-coated popcorn. FLNA also sells and distributes Oh Boy! Oberto brand meat snacks under an agreement with the Oberto Sausage Company. FLI - The Company's international snack food business is conducted through Frito-Lay International (FLI). FLI's products are available in 120 countries outside of the United States and Canada through Company-owned businesses and affiliated companies. On most of the European continent, its snack food business is conducted through Snack Ventures Europe, a joint venture between PepsiCo and General Mills, Inc. , in which the Company owns a 60 % interest.
In 10 Latin America countries, its snack food business is conducted through joint ventures between PepsiCo and Libracor, Ltd. , a part of Venezuela's Empresas Polar Group. The Company has a 50 % interest in these ventures, except in one country, where it owns a 70 % interest. FLI sells a variety of snack food products catered to local tastes, including Sabritas brand snack foods in Mexico, Walkers brand snack foods in the United Kingdom, Smith's brand snack foods in Australia and Games brand cookies and Alert brand sweet snacks in Mexico. In addition, many of its United States brands such as Lay's, Ruffles, Doritos, Tostitos, Cheetos and Frito's brand salty snack foods have been introduced internationally. Principal international markets include Mexico, the United Kingdom, Brazil, Spain, the Netherlands, Australia and South Africa. Beverages The Company's soft drink business operates as the Pepsi-Cola Company and is comprised of two business units.
They are Pepsi-Cola North America (PCNA) and Pepsi-Cola International (PCI). PCNA - manufactures concentrates of Pepsi-Cola Beverages, such as Pepsi, Pepsi-Cola, Diet Pepsi, Pepsi One, Mountain Dew, Slice, Mug, Fruit works and Sierra Mist, for sale to franchised bottlers in the United States and Canada. PCNA's bottlers are licensed, within defined territories, to manufacture, market, sell and distribute Pepsi-Cola Beverages and syrups. The Company has a minority interest in seven of these bottlers, including The Pepsi Bottling Group, Pepsi Americas and Pepsi Bottling Ventures LLC that distribute three quarters of its North American volume. The Pepsi/Lipton Tea Partnership, a joint venture of PepsiCo and Unilever N. V. , sells tea concentrate to Pepsi-Cola bottlers, and develops and markets ready-to-drink tea products under the Lipton trademark, including Lipton Brisk and Lipton's Iced Tea.
PepsiCo's partnership with the Starbucks Corporation develops ready-to-drink coffee products that are sold under the Starbucks Frappaccino trademark and are distributed by Pepsi-Cola bottlers. PCNA also licenses the processing and distribution of Aquafina bottled water. In addition, PCNA manufactures and sells Dole juice drinks for sale and distribution by Pepsi-Cola bottlers. PCI - manufactures concentrates of Pepsi, Pepsi-Cola, Diet Pepsi, Pepsi One, Pepsi Max, 7 UP, Miranda, Kas, Mountain Dew and other brands for sale to franchised bottlers outside of the United States and Canada. PCI's bottlers are licensed, within defined territories, to manufacture, market, sell and distribute Pepsi-Cola beverages and syrups.
The Company has a minority interest in approximately 40 of these bottlers. In certain countries, PCI owns and operates the bottling businesses that manufacture, sell and distribute the Pepsi-Cola Beverages. Pepsi-Cola Beverages are sold in approximately 160 countries. Principal international markets include Mexico, China, Saudi Arabia, India, Argentina, Thailand, the United Kingdom, Spain, The Philippines and Brazil. Tropicana Products, Inc. (TPI) produces, markets, sells and distributes its products under trademarks such as Tropicana Pure Premium and Tropicana Season's Best. In the United States, TPI's portfolio also includes Tropicana Twister juice beverage products and Tropicana Pure Tropics 100 % juice products.
It also manufactures and sells From " Vita chilled juices, Look nectar's and juices, Copella fruit juices and Al valle soups and fruit juices in Europe. Principal international markets include Belgium, Canada, France and the United Kingdom. Company History Pharmacist Caleb Bradham invented Pepsi in 1898 in New Bern, North Carolina. He named his new drink Pepsi-Cola (claiming it cured dyspepsia, or indigestion) and registered the trademark in 1903. Following The Coca-Cola Company's example, Bradham developed a bottling franchise system. By WWI, 300 bottlers had signed up.
After the war, Bradham stockpiled sugar to safeguard against rising costs, but in 1920 sugar prices plunged, forcing him into bankruptcy in 1923. Pepsi existed on the brink of ruin under various owners until Loft Candy bought it in 1931. Its fortunes improved in 1933 when, in the midst of the Depression, it doubled the size of its bottles to 12 ounces without raising the five-cent price. In 1939 Pepsi introduced the world's first radio jingle. Two years later Loft Candy merged with its Pepsi subsidiary and became The Pepsi-Cola Company. Donald Kendall, who became Pepsi-Cola's president in 1963, turned the firm's attention to young people ("The Pepsi Generation").
It acquired Mountain Dew in 1964 and became PepsiCo in 1965, when it acquired Frito-Lay. In 1972 PepsiCo agreed to distribute Stolichnaya vodka in the US in exchange for being the only Western firm allowed to bottle soft drinks in the USSR. With the purchases of Pizza Hut (1977), Taco Bell (1978), and Kentucky Fried Chicken (1986), it became a major force in the fast-food industry. When Coca-Cola changed its formula in 1985, Pepsi had a short-...
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