A leading food and beverage company
PepsiCo (PEP) is the second largest non-alcoholic beverage maker in the US, with an extensive portfolio of carbonated and non-carbonated beverage brands like Pepsi, Mirinda, Tropicana, Mountain Dew, and Aquafina. PepsiCo is the market leader in the US snack food space and owns strong brands like Lay’s, Doritos, and Cheetos. The company generated $66.7 billion in revenues in fiscal 2014 from its food and beverage businesses.
PepsiCo sells its products in more than 200 countries. The company’s US business generated 51% of total 2014 net revenues, with the remaining revenues coming from its international operations. The company’s vast presence in the international markets provides it immense growth opportunities, but also exposes the company to currency fluctuations.
PepsiCo continues to grow
To cater to increasing health consciousness of consumers, PepsiCo has been innovating nutritious products and healthier versions of its existing product offerings. We’ll discuss more about the company’s focus on innovation in a later part of this series. PepsiCo is also leveraging its presence in international markets and its complementary food and beverage businesses to expand further.
The company continues to invest heavily in the marketing of its products. In 2014, the company spent $3.9 billion on advertising and other marketing activities.
Peers and series overview
PepsiCo’s rivals in the non-alcoholic beverage industry include Coca-Cola (KO), Dr Pepper Snapple Group (DPS), and Monster Beverage (MNST). In the food space, PepsiCo’s peers include Mondelez International (MDLZ), Kraft Foods Group (KRFT), and Kellogg (K). Food and beverage companies fall under the consumer staples category. The SPDR S&P 500 ETF (SPY) has 9.69% holdings in consumer staples.
This series will discuss PepsiCo’s 4Q14 and full-year 2014 operating performance, the company’s complementary businesses, new products, dividends, and its performance relative to peers.