PepsiCo, Inc.
PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through six segments: PepsiCo Foods North America; PepsiCo Beverages North America; International Beverages Franchise; Europe, Middle East and Africa; Latin America Foods; and Asia Pacific Foods. It offers cereals, chips, dips, granola bars, oatmeal, pasta, rice, and syrups and mixes; refrigerated dips and spreads; beverage concentrates, fountain syrups, and finished goods; and ready-to-drink tea and coffee products. The company also provides SodaStream sparkling water makers and related products, as well as various dairy products under the Agusha, Chudo, and Domik v Derevne brands. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. PepsiCo, Inc. was founded in 1898 and is based in Purchase, New York.
What does it do?
PepsiCo is one of the largest food and drink companies on the planet. You almost certainly have their products in your home right now — Pepsi, Gatorade, Lay's chips, Doritos, Quaker Oats, and Cheetos are all PepsiCo brands. They don't just make fizzy drinks; roughly half their business is snacks and food, which most people don't realize. They sell these products in over 200 countries, from corner shops in Mexico to supermarkets in China.
PepsiCo is considered a 'defensive' stock, meaning people keep buying their chips and drinks even during recessions — when times get tough, consumers cut holidays before they cut snacks. With $93.9 billion in annual revenue, PepsiCo is a bellwether for how the global consumer is holding up under inflation and economic pressure. Right now, investors are closely watching whether PepsiCo can keep raising prices without losing shoppers to cheaper store-brand alternatives.
How does it make money?
PepsiCo makes money by manufacturing and selling branded food and beverages through six business divisions. Their North American food business (Frito-Lay, Quaker) and North American beverages are the biggest earners, together accounting for the majority of revenue. They generated $93.9 billion in revenue in their latest year, up from $91.9 billion the prior year — a roughly 2% increase. They earn profit through a mix of selling direct to retailers like Walmart and through their own distribution network.
Why do investors care?
Investors like PepsiCo because it pays a reliable and growing dividend — it has raised its dividend for over 50 consecutive years, earning it the title of 'Dividend King.' The growth story rests on emerging markets like India, Latin America, and Southeast Asia, where a growing middle class is buying more branded snacks and drinks. For the thesis to work, PepsiCo needs to keep growing internationally while defending its shelf space at home against private-label (supermarket own-brand) competition. A successful push into healthier product lines and zero-sugar drinks also matters as consumer tastes shift.
Deep Dive
MemberA full investor briefing on PepsiCo, Inc. — history, leadership, risks, and outlook.