PEPSICO COMPANY PRESENTATION

PEPSICO is a multinational manufacturer of beverage&corn chips, potato chips and other snack foods.``

CONTENTS

HistoryMission and VisionValues and Philosophy OriginsAcquisitions and divestmentsRestructuringCompetitionProducts and brandsAreas of business

PEPSICO HISTORY

PepsiCo Inc. is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo, Inc. is founded by Donald M. Kendall, President and Chief Executive Officer of Pepsi-Cola and Herman W. Lay, Chairman and Chief Executive Officer of Frito-Lay, through the merger of the two companies. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001 – which added the Gatorade brand to its portfolio as well.As of 2009, 19 of PepsiCo's product lines generated retail sales of more than $1 billion each, and the company’s products were distributed across more than 200 countries, resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second largest food & beverage business in the world. Within North America, PepsiCo is ranked (by net revenue) as the largest food and beverage business.Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the company employed approximately 285,000 people worldwide as of 2010. The company’s beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions. PepsiCo is a SIC 2080 (beverage) company.

PEPSICO MISSION AND VISION

Our MissionOur mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

Our Vision"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.

PEPSICO VALUES & PHILOSOPHY

`` Our Values & Philosophy are a reflection of the socially and environmentally responsible company we aspire to be. They are the foundation for every business decision we make.``

ORIGINS

The recipe for Pepsi, the soft drink, was first developed in the 1890s by a New Bern, North Carolina pharmacist and industrialist, Caleb Bradham, who named it "Pepsi-Cola" in 1898. As the cola developed in popularity, he created the Pepsi-Cola Company in 1902 and registered a patent for his recipe in 1903.[3] The Pepsi-Cola Company was first incorporated in the state of Delaware in 1919.[4] The company went bankrupt in 1931 and on June 8 of that year the trademark and syrup recipe was bought by Charles Guth who owned a syrup manufacturing business in Baltimore, Maryland. Guth was also the president of Loft, Incorporated, a leading candy manufacturer and used the company's labs and chemists to reformulate the syrup. He further contracted to stock the soda in Loft's large chain of candy shops and restaurants, which were known for their soda fountains, used Loft resources to promote Pepsi, and moved the soda company to a location close by Loft's own facilities in New York City. In 1935 the shareholders of Loft sued Guth for his 91% stake of PepsiCo in the landmark Guth v. Loft Inc.. Loft won the suit and on May 29, 1941 formally absorbed Pepsi into Loft, which was then rebranded as Pepsi Cola Company that same year. (Loft restaurants and candy stores were spun off at this time.) In the early 1960s the company product line expanded with the creation of Diet Pepsi and purchase of Mountain Dew.[5]

Separately, the Frito Company and H.W. Lay & Company – two American potato and corn chip snack manufacturers – began working together in 1945 with a licensing agreement allowing H.W. Lay to distribute Fritos in the Southeastern United States. The companies merged to become Frito-Lay, Inc. in 1961.[6]

In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the company it is known as at present. At the time of its foundation, PepsiCo was incorporated in the state of Delaware and headquartered in Manhattan, New York. The company's headquarters were relocated to its still-current location of Purchase, New York in 1970,[7] and in 1986 PepsiCo was reincorporated in the state of North Carolina.[4]

PepsiCo was the first company to stamp expiration dates, starting in March 1994.

ACQUISITIONS AND DIVESTMENTS

Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses outside of its core focus of packaged food and beverage brands; however it exited these non-core business lines largely in 1997, selling some, and spinning off others into a new company named Tricon Global Restaurants, which later became known as Yum! Brands, Inc..[8] PepsiCo also previously owned several other brands that it later sold, in order to allow it to return focus to its primary snack food and beverage lines, according to investment analysts reporting on the divestments in 1997.[9] Brands formerly owned by PepsiCo include: Pizza Hut,[10] Taco Bell,[10] KFC,[10] Hot 'n Now,[11] East Side Mario's,[12] D'Angelo Sandwich Shops,[13] Chevys Fresh Mex, California Pizza Kitchen,[14] Stolichnaya[15] (via licensed agreement), Wilson Sporting Goods[16] and North American Van Lines.[17]

The divestments concluding in 2007 were followed by multiple large-scale acquisitions, as PepsiCo began to extend its operations beyond soft drinks and snack foods into other lines of foods and beverages. PepsiCo purchased the orange juice company Tropicana Products in 1998,[18] and merged with Quaker Oats Company in 2001,[19] adding with it the Gatorade sports drink line and other Quaker Oats brands such as Chewy Granola Bars and Aunt Jemima, among others.[20]

In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this acquisition was completed, resulting in the formation of a new wholly owned subsidiary of PepsiCo, Pepsi Beverages Company.[21] In February 2011, the company made its largest international acquisition by purchasing a two-thirds (majority) stake in Wimm-Bill-Dann Foods, a Russian food company which produces milk, yogurt, fruit juices and dairy products.[22] When it acquired the remaining 23% stake of Wimm-Bill-Dann Foods in October 2011, PepsiCo became the largest food and beverage company in Russia.[23][24]

RESTRUCTURING

In February 2012 ahead, CEO of PepsiCo Inc. plans to cut 8,700 jobs or about 3 percent of the PepsiCo's global workforce and boost marketing spending for its brand by as much as $600 million. It may save about $1.5 billion by 2014.[25]

COMPETITION

The Coca-Cola Company has historically been considered PepsiCo’s primary competitor in the beverage market,[26] and in December 2005, PepsiCo surpassed The Coca-Cola Company in market value for the first time in 112 years since both companies began to compete. In 2009, the Coca-Cola Company held a higher market share in carbonated soft drink sales within the U.S.[27] In the same year, PepsiCo maintained a higher share of the U.S. refreshment beverage market, however, reflecting the differences in product lines between the two companies.[27] As a result of mergers, acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its business has shifted to include a broader product base, including foods, snacks and beverages. The majority of PepsiCo's revenues no longer come from the production and sale of carbonated soft drinks.[28] Beverages accounted for less than 50 percent of its total revenue in 2009. In the same year, slightly more than 60 percent of PepsiCo's beverage sales came from its primary non-carbonated brands, namely Gatorade and Tropicana.[27]

PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack food market, accounting for approximately 39 percent of U.S. snack food sales in 2009.[27] One of PepsiCo's primary competitors in the snack food market overall is Kraft Foods, which in the same year held 11 percent of the U.S. snack market share.[27]

PRODUCTS AND BRANDSPEPSI-COLA BRANDS

PepsiSierra Mist

SliceTropicana

Ocean Spray (License)More

Mountain DewAMP Energy

Mug Root BeerNo Fear

Seattle's Best CoffeeTazoSoBe

AquafinaStarbucks (Partnership)

Lipton (Partnership)Outside North America

FRITO-LAY-NORTH AMERICA BRANDS

Lay's potato chipsLay's Kettle Cooked potato chipsWavy Lay's potato chipsBaked Lay's potato crispsMaui Style potato chipsRuffles potato chipsBaked Ruffles potato crispsDoritos tortilla chipsBaked Doritos tortilla chipsTostitos tortilla chipsBaked Tostitos tortilla chipsSantitas tortilla chipsStacy's pita chipsFritos corn chips

FRITO-LAY- NORTH AMERICA BRANDSCheetos cheese flavored snacks

Rold Gold pretzels Funyuns onion flavored rings Sunchips

multigrain snacks Sabritones puffed wheat snacks

Cracker Jack candy coated popcorn Chester's popcorn Grandma's cookies Gamesa

cookies and wafers Munchos potato crisps Smartfood popcorn

Baken-ets fried pork skins Matador meat snacks

Frito-Lay nuts Frito-Lay, Fritos and Tostitos dips & salsas Frito-Lay,

Doritos and Cheetos snack crackers Hickory Sticks

PRODUCTS AND BRANDSFRITO-LAY OUTSIDE NORD

AMERICA BRANDS

Bocabits wheat snacksCrujitos corn snacksFandangos corn snacksHamka's snacksNiknaks cheese snacksQuavers potato snacksSabritas potato chipsSmiths potato chipsWalkers potato crispsWalkers Square potato snacksWalkers French Fries potato sticks

FRITO-LAY OUTSIDE NORD AMERICA BRANDS

Walkers Monster Munch corn snacks, Gamesa cookies Doritos Dippas Sonric's sweet snacks, Wotsits corn snacks, Walkers Sensations Doritos, A La Turca Lay's Mediteranneas, Red Rock Deli Kurkure Smiths Sensations Lays Artesanas PC Cheetos Shots Quavers Snacks

GATORADE BRANDS

TROPICANA BRANDS

QUAKER BRANDS

PRODUCTS AND BRANDS

AREAS OF BUSINESS

The structure of PepsiCo's global operations has shifted multiple times in its history as a result of international expansion, and as of 2010 it is separated into four main divisions:[31] PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of the company’s net revenues came from North and South America, 16 percent from Europe and 13 percent from Asia, the Middle East and Africa.[32] Approximately 285,000 people are employed by PepsiCo worldwide as of 2010.[33]