PepsiCo

This PepsiCo SWOT analysis reveals how the second largest food company in the world uses its competitive advantages to dominate snack and beverage industries.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. If you want to find out more about the SWOT of PepsiCo, you’re in the right place.

Company Background

Key Facts

Name	PepsiCo Inc.
Founded	August 28, 1898
Logo
Industries served	Beverage (Pepsi, Mountain Dew, Gatorade, Sierra Mist) Food (Quaker Oats, WBD, Rold Gold) Snack (Lay’s, Doritos, Cheetos)
Geographic areas served	Worldwide (more than 200 countries)
Headquarters	Purchase, New York, U.S.
Current CEO	Indra Nooyi
Revenue (US$)	63.525 billion (2017) 1.2% increase over 62.799 billion (2016)
Profit (US$)	4.857 billion (2017) 30.3% decrease over 6.329 billion (2016
Employees	263,000 (2017)
Main Competitors	The Coca-Cola Company, DPSG, Mondelēz International, Monster Beverage Corporation, Hansen Natural Corporation, National Beverage Corp., Kraft Foods Group, The Kellogg Company, ConAgra Foods., Nestlé S.A., Snyder’s-Lance and other beverage, food and snack companies.

PepsiCo business overview from the company’s financial report:

“We are a leading global food and beverage company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.

Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of convenient and enjoyable beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories.

Performance with Purpose is our goal to deliver sustained value by providing a wide range of beverages, foods and snacks, from treats to healthy eats; finding innovative ways to minimize our impact on the environment and lower our costs through energy and water conservation as well as reduce our use of packaging material; providing a safe and inclusive workplace for our employees globally; and respecting, supporting and investing in the local communities in which we operate.

In 2017, sales to Walmart Stores, Inc., including Sam’s Club (Sam’s), represented approximately 13% of our total net revenue. Our top five retail customers represented approximately 37% of our 2017 net revenue in North America, with Walmart (including Sam’s) representing approximately 19%.

In many countries in which our products are sold, including the United States, The Coca-Cola Company is our primary beverage competitor.

Other beverage, food and snack competitors include, but are not limited to, DPSG, Kellogg Company, The Kraft Heinz Company, Mondelez International, Inc., Monster Beverage Corporation, Nestlé S.A., Red Bull GmbH and Snyder’s-Lance, Inc.

Many of our food and snack products hold significant leadership positions in the food and snack industry in the United States and worldwide. In 2017, we and The Coca-Cola Company represented approximately 23% and 20%, respectively, of the U.S. liquid refreshment beverage category by estimated retail sales in measured channels.”^[1]

You can find more information about the business in PepsiCo’s official website or Wikipedia’s article.

PepsiCo SWOT analysis

Strengths

1. Comprehensive product portfolio with 100 brands serving nearly every niche in the beverage, food and snack industries.

Commencing operations in 1965, PepsiCo has become the second largest food and beverage company in the world today.

The company earned US$63.525 billion in 2017, second only to Nestlé S.A. PepsiCo was able to achieve this via strengthening its product portfolio and offering as many different beverages and foods as possible.

The company sells nearly 100 different brands, of which 22 have each generated more than US$1 billion dollars in 2017.^[1] In addition, more than 10 brands have generated between US$500 million and US$1 billion in revenue.

Figure 1. Brand portfolio by world’s largest food and beverage companies

Source: The respective companies’ official websites and financial reports ^{[1][2][3][4][5]}

Figure 2. PepsiCo’s top earning brands

Source: PepsiCo brands^[6]

PepsiCo’s brand portfolio is highly diversified. No competitor has as many high earning brands as PepsiCo. They each rely on a few main products to earn the majority of their revenue. This makes them very vulnerable to any changes in their core products’ markets.

PepsiCo is better equipped to satisfy the needs of its customers with its wide variety of successful products. The company offers nearly every type beverage or snack and its brands can often be substituted for each other.

For example, Lays can be replaced with Doritos, Cheetos, Ruffles, Tostitos or Fritos, so if one product doesn’t satisfy a consumer’s needs, PepsiCo can offer many more choices. Therefore, changes in customer tastes do not affect the company as severely as they would other companies.

2. Brand recognition and reputation

PepsiCo owns and markets some of the most recognizable global brands, including Pepsi, Tropicana, Gatorade, Mountain Dew, Aquafina, Lay’s, Doritos, Cheetos and many other popular brands.

According to Interbrand^[7] and Forbes^[8], the Pepsi brand is the 22nd and 30th most valuable brand in the world, worth US$20.491 billion and US$18.2 billion, respectively. Forbes also identified Frito-Lay as the 40th most valuable brand in the world, worth US$13.6 billion.

Except for Coca-Cola and Sprite, no other non-alcoholic beverage brand besides Pepsi has been recognized as being one of the top 100 most valuable brands in the world.

According to IRI data, which measured the most popular U.S. snack brands in the first half of 2017, 8 of the 10 most popular snack brands were owned by PepsiCo.^[9]

Figure 3. Top 10 best-selling U.S. snack brands

Ranking	Brand	Owner
1.	Lay’s	owned by PepsiCo
2.	Doritos	owned by PepsiCo
3.	Cheetos	owned by PepsiCo
4.	Ruffles	owned by PepsiCo
5.	Pringles
6.	Tostitos	owned by PepsiCo
7.	Wavy Lays	owned by PepsiCo
8.	Fritos	owned by PepsiCo
9.	Tostitos Scoops	owned by PepsiCo
10.	Snyder’s of Hanover

Source: Bakery and Snacks ^[9]

The company sells its products in more than 200 countries, so consumers are aware of PepsiCo’s brands all over the world. Owning and selling popular brands also helps PepsiCo to cross-sell its other brands or introduce new products to the market much more easily.

Acknowledgement: We gratefully acknowledge the Strategic Management Insight organization for their efforts in sharing information about strategic management and corporate analyses. Thank you Strategic Management Insight team.

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Acknowledgement: We gratefully acknowledge the Strategic Management Insight organization for their efforts in sharing information about strategic management and corporate analyses. Thank you Strategic Management Insight team.