PepsiCo - History, Evolution, Present and the Future
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Transcript of PepsiCo - History, Evolution, Present and the Future
History & Origin . . . . . . . . . . . . . . . . . . . 3
Early Evolution . . . . . . . . . . . . . . . . . . . .4
Global Expansion . . . . . . . . . . . . . . . . . 5
Modern Business . . . . . . . . . . . . . . . . . . 7
Company Structure . . . . . . . . . . . . . . . 9
Recent Efforts . . . . . . . . . . . . . . . . . . . .10
Company DNA . . . . . . . . . . . . . . . . . . 14
Summary . . . . . . . . . . . . . . . . . . . . . . . 15
Social Media Accounts . . . . . . . . . . . 16
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Caleb D. Bradham became convinced his drink relieved upset
stomachs and the pain from peptic ulcers, so in 1898 he had
christened it Pepsi-Cola.
In 1902, the first year of operation, he shifted around 2,000 gallons
of syrup and the next year ran advertising campaigns -
Exhilarating, Invigorating, Aids Digestion - which quadrupled sales
to almost 8,000 gallons. This volume was 1% of Coca-Cola’s sales
in the same year.
In January 1922, with liabilities five times assets on the balance
sheet, Caleb lost control to a Wall Street firm and left the
beverages business for good.
In 1931, Pepsi-Cola was in no fit state to survive the Great
Depression thus, it was declared bankrupt once again.
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Charles C. Guth, the president of the Loft Inc. chain of
confectionery stores, and after not being given a bigger discount
after selling Coke in his stores, bought the Pepsi-Cola firm for
around $12,000 and kicked Coke out of his stores.
Conceived the idea of partnering with bottlers that enabled him to
sell twice the amount of Pepsi over a bottle of Coke.
Walter Staunton Mack Junior, succeeded Guth and took a riskier
approach in promoting Pepsi through advertising and jingles that
paid off by creating a unique personality for the brand, they also
discontinued using beer bottles and instead adopted a unique
Pepsi bottle.
Alfred Steele brought Pepsi to a whole new level. He improved its
quality by setting-up standards of the cola’s production as well as
its quality in terms of taste and consistency.
By the time Steele died in 1959, Pepsi’s sales had tripled. 4
In 1934 Pepsi opened its first bottling plant outside the US,
Montreal serviced French Canada, where Pepsi holds the lead over
Coca-Cola to this day. Their next plants were in Cuba and the
Dominican Republic.
In 1940 Walter Mack poached William B. Forsythe from the Coca-
Cola Export Corporation. As a result, between 1945 and 1950,
Forsythe opened up fifty-six foreign markets for the Pepsi-Cola
brand. This increased export sales by 45% in 1946 and another
70% the year after. The countries in Latin America, South Africa,
the Middle East and the Far East all became strong markets for
Pepsi.
Future president Donald Kendall, in the 1950s, pushed the
company’s export side. During his first three years, Pepsi
International opened a new bottling plant abroad at the staggering
rate of one every 11.5 days. 5
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The outcome was that an international bottler network numbering
70 in 1957 had risen to 278 by 1962. Pepsi was now available in
nearly a hundred countries and international sales accounted for
half of Pepsi-Cola’s total revenue.
Eventually, attention turned to Europe and bottling partnerships
with big local players such as Britain’s Schweppes, France’s Perrier
and the Netherland’s Heineken.
In 1965, Donald M. Kendall initiated the diversification of brands
and products that Pepsi offered by merging with Frito-Lay; it now
became a beverage and snack company.
By 1970’s, PepsiCo continued to acquire different companies,
specifically quick service restaurant chains, where they were
initially falling a bit short, such as Taco Bell in 1977 and Pizza Hut
in 1978.
Frito-Lay was also able to reap the benefits of the merger as their
sale grew exponentially locally and internationally.
Grossing $7 billion by 1981, PepsiCo solidified itself in its three
divisions: soft drinks, snack foods and restaurants.
In later years, PepsiCo continued to dominate the cola wars and
the turning point was in 1985 when Coke decided to change their
beloved formula which led to dissatisfaction amongst its
consumers.
PepsiCo continued to acquire new beverage brands such as 7-Up.
7
At the end of the 80’s, PepsiCo’s sales totaled to $11 Billion, the
highest ever recorded in the company’s history.
During the 1990’s, PepsiCo continued to broaden its current roster
of beverage products by latching onto emerging trends such as:
Ready to drink teas and coffee and unique flavors for Lays
Not only reached $20 Billion in sales but also directly influenced
the sales growth of American supermarkets, mass merchandisers
and drug stores more than any other packaged goods company in
1998.
In 2003, PepsiCo was the fourth-largest food and beverage
company in the world behind Nestlé, Kraft and Unilever.
8
Four Main Divisions:
PepsiCo Americas Foods
PepsiCo Americas Beverages
PepsiCo Europe
PepsiCo Asia, Middle East and Africa
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2004
Formed a single cohesive PepsiCo.
2005
Acquired several European snack companies and took full
ownership of Snack Ventures Europe, Europe’s largest snack food
company
Finalized their business process transformation project for 2006,
The Smart Spot Initiative, which included a reformulation of 250
product lines and promotion of active living to its consumers
2006
Experienced continuous growth despite sales declines in the US, as
they were performing outstandingly in their Chinese, South-
American and Russia markets
Launched the healthier lines of their snacks and beverages as part
of their smart spot initiative which led to a two-thirds growth in
sales for North America 10
2007
Corporate restructuring due to CEO change
Dismembering of PepsiCo Americas Food & Beverages back to
their separate brands
PepsiCo International was still the largest contributor to the
company’s sales and profit growth
2008
Reorganization of PepsiCo into three divisions to cover North –
South America, UK/Europe and Middle East/Africa/Asia
Total company operating profit was down due to the economic
recession as well as the costly major restructuring
11
2009 Merging of PepsiCo, Pepsi Bottling Group and Pepsi Americas , to
create a more agile, efficient, innovative and competitive beverage
system which led to the valuation of PepsiCo at $60 Billion Declines yet again were experienced in the North American market
due to rebranding efforts of two flagship beverages: Aquafina and
Gatorade Stalling of sales were experienced in China, while in the rest of
Asia/Middle East/Africa snacks and beverage volumes grew
2010 Growth in most of the snack division per region was evident except
in North America Doubled sales and overall improvement was evident in PepsiCo
Americas due to: Inclusion of the bottled sales rather than concentrate sales in
the acquired bottlers
12
The sales volume of brands distributed by the acquired bottlers
and not owned by PepsiCo The organic sales volume performance of PepsiCo brands
Announced an increased R&D investment in sweetener
technologies, next-generation processing and packaging and
nutritional products for the coming years
2011 Acquiring the bottlers, WBD and the enhanced agreement with the
Dr. Pepper Snapple Group gave a good gloss to the top-line
numbers, up almost $9 billion In Asia/Middle East/Africa, snacks were doing better than
beverages, up 15% versus 5% Latin America Foods pushed forward in its advantaged markets of
Mexico and Brazil In Europe (discounting the huge impact of the WBD acquisition
that added 31% to the division’s volume), underlying snacks grew
volume by 4%, thanks to the huge Walkers UK unit and 1% in
beverages 13
Has the DNA of a Brawler wherein from the time the company was
established to its current success as the world’s second largest
food and beverage company, it constantly battled and overcame
struggles and challenges.
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The rise of PepsiCo within one person’s lifespan from serial
bankrupt to the world’s second largest and North America’s largest
food and beverage company is one of the business success stories
of the modern era
PepsiCo sets targets to reduce bad ingredients by 2020
PepsiCo needs to get back to the attitude that got it to where it is
today
Website: www.pepsico.com/ Facebook: www.facebook.com/PepsiCo
Instagram: instagram.com/pepsi Twitter: www.twitter.com/pepsico Youtube: www.youtube.com/user/PepsiCoVideo
LinkedIn: www.linkedin.com/company/pepsico
Google+: plus.google.com/u/0/111883881632877146615/posts
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