PEPSICO INC (PEP)

PepsiCo, Inc., incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986, is a leading global beverage and convenient food company operating through its consolidated subsidiaries under a portfolio of well-known brands including Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream. The company makes, markets, distributes and sells its products through its own operations, authorized bottlers, contract manufacturers and other third parties, serving customers and consumers in more than 200 countries and territories. PepsiCo is organized into seven reportable segments: Frito-Lay North America (FLNA), which handles branded convenient foods in the U.S. and Canada; Quaker Foods North America (QFNA), covering cereal, rice, pasta and other branded food products; PepsiCo Beverages North America (PBNA), encompassing beverage businesses in the U.S. and Canada; Latin America (LatAm); Europe; Africa, Middle East and South Asia (AMESA); and Asia Pacific, Australia and New Zealand and China Region (APAC), the latter four covering both beverage and convenient food businesses in their respective geographies.

The company distributes products via direct-store-delivery (DSD) systems, customer warehouse networks, third-party distributors, and increasingly through e-commerce platforms and direct-to-consumer channels. Key ingredients include aspartame, corn, corn sweeteners, flavorings, flour, juice concentrates, oats, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and wheat, along with packaging materials such as PET and polypropylene resins, aluminum, glass, and cardboard, with an emphasis on sustainability and recyclable packaging. In 2022, the company completed the sale of its Tropicana, Naked and other select juice brands to PAI Partners while retaining a 39% noncontrolling interest in the newly formed Tropicana Brands Group (TBG) joint venture; PepsiCo also began distributing Hard MTN Dew, an alcoholic beverage from Boston Beer Company, and maintains various joint ventures including with Unilever (Lipton), Starbucks, and Strauss Group (Sabra).

The company's primary beverage competitor is The Coca-Cola Company, with PepsiCo and Coca-Cola representing approximately 20% and 21%, respectively, of the U.S. liquid refreshment beverage category in 2022; other competitors include Kellogg, Mondelēz, Nestlé, Keurig Dr Pepper, and Monster Beverage, among others. Walmart and its affiliates, including Sam's Club, represented approximately 14% of PepsiCo's 2022 consolidated net revenue, making it a significant customer whose loss would materially affect the FLNA, QFNA and PBNA divisions. The company invests heavily in research and development across global centers in Brazil, China, India, Ireland, Mexico, Russia, South Africa, the UK and the U.S., focusing on new product innovation, reduced sugar/sodium/saturated fat formulations, sustainable packaging, and digital/AI capabilities.

PepsiCo faces extensive regulatory oversight across food safety, environmental, labor, trade, tax, and data privacy laws in the U.S. and internationally, and continues to navigate risks from the Ukraine conflict—its Russian operations accounted for 5% of 2022 consolidated net revenue while certain Ukraine operations remain suspended—as well as inflationary pressures, supply chain disruptions, and evolving regulations targeting sugar content, packaging sustainability, and climate-related greenhouse gas emissions. The company reported common stock outstanding of approximately 1.38 billion shares as of February 2023, with a market value of nonaffiliate-held shares of approximately $224.2 billion as of June 2022, and is classified as a large accelerated filer.