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PepsiCo

From Wikipedia, the free encyclopedia

This article is about the company. For the soft drink, see Pepsi.

PepsiCo Inc.

Type

Public

Traded as

NYSE: PEP NASDAQ: PEP S&P 500 Component

Industry

Foods, Beverages

Founded

North Carolina, U.S. (1965)

Founder(s)

Donald Kendall, Herman Lay

Headquarters

Purchase, New York, United States

Area served

Worldwide

Key people

Indra Nooyi (Chairman & CEO)[1]

Products

See list of PepsiCo products

Revenue

US$ 57.838 billion (2010)[2]

Operating income

US$ 8.332 billion (2010)[2]

Net income

US$ 6.338 billion (2010)[2]

Total assets

US$ 68.153 billion (2010)[2]

Total equity

US$ 21.476 billion (2010)[2]

Employees

294,000 (2010)[2]

Divisions

PepsiCo Americas Foods; PepsiCo Americas Beverages; PepsiCo Europe; PepsiCo Asia, Middle East & Africa

Subsidiaries

List of subsidiaries

Website

PepsiCo.com

PepsiCo Inc. (NYSE: PEP) 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 was formed in 1965 with the merger of thePepsi-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 companys 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 companys beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions. PepsiCo is a SIC 2080 (beverage) company.

Contents
[hide]

1 History

o o o

1.1 Origins 1.2 Acquisitions and divestments 1.3 Competition

2 Products and brands 3 Areas of business

o o o o

3.1 PepsiCo Americas Foods 3.2 PepsiCo Americas Beverages 3.3 PepsiCo Europe 3.4 PepsiCo Asia, Middle East & Africa

4 Corporate governance

o o

4.1 Headquarters 4.2 Charitable activities

5 Environmental record and product nutrition

o o

5.1 Environmental record 5.2 Product nutrition

6 See also 7 References 8 External links

[edit]History [edit]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 PepsiCo. (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 ofDelaware 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]

[edit]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-BillDann 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]

[edit]Competition
The Coca-Cola Company has historically been considered PepsiCos primary competitor in the beverage market,[25] 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.[26] 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.[26] 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.[27] 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.[26] 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.[26] 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.[26]

[edit]Products
Brand

and brands
Largest PepsiCo Brands (based on 2009 retail sales)

Pepsi Mountain Dew Lay's potato chips Gatorade Diet Pepsi Tropicana beverages 7UP (outside U.S.) Doritos tortilla chips Lipton teas (PepsiCo/Unileverpartnership) Quaker foods and snacks Cheetos Mirinda Ruffles potato chips Aquafina bottled water Pepsi Max Tostitos tortilla chips Sierra Mist Fritos corn chips Walkers potato crisps Source: 2009 Annual Report[28] $0 $5b $10b $15b $20b

PepsiCos product mix as of 2009 (based on worldwide net revenue) consists of 63 percent foods, and 37 percent beverages.[26] On a worldwide basis, the companys current products lines include several hundred

brands that in 2009 were estimated to have generated approximately $108 billion in cumulative annual retail sales.[28] The primary identifier of companies' main brands within the food and beverage industry are those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands met this description as of 2009: PepsiCola, Mountain Dew, Lay's, Gatorade, Tropicana, 7Up, Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max, Tostitos, Sierra Mist, Fritos, and Walker's.[29][28]

[edit]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:[30] PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of the companys net revenues came from North and South America, 16 percent from Europe and 13 percent from Asia, the Middle East and Africa.[31] Approximately 285,000 people are employed by PepsiCo worldwide as of 2010.[32]

[edit]PepsiCo

Americas Foods

PepsiCo Americas Foods consists of the companys food and snack operations in North and South America. This operating division is further segmented into Frito-Lay North America, Quaker Foods & Snacks, Sabritas, Gamesa and Latin America Foods. Food and snack sales in North and South America combined contributed 48 percent of PepsiCos net revenue in 2009.[33][28][34] Frito-Lay North America, the result of a merger in 1961 between the Frito Company and the H.W. Lay Company, produces the top selling line of snack foods in the U.S. Its main brands in the U.S., Canada and Mexico and include Lay's and Ruffles potato chips, Doritos tortilla chips, Tostitos tortilla chips and dips, Cheetos cheese flavored snacks, Fritos corn chips, Rold Gold pretzels, Sun Chips and Cracker Jack popcorn. Products made by this division are sold to independent distributors and retailers, and are transported from Frito-Lay's manufacturing plants to distribution centers, principally in vehicles owned and operated by the company.[35] Quaker Foods North America, created following PepsiCos acquisition of the Quaker Oats Company in 2001, manufactures, markets and sells Quaker Oatmeal, Rice-A-Roni, Cap'n Crunch and Life cereals, as well as Near East side dishes within North America. This division also owns and produces the Aunt Jemima brand, which as of 2009 was the top selling line of syrups and pancake mixes within this region.[26][36] Sabritas and Gamesa are two of PepsiCos food and snack business lines headquartered in Mexico, and they were acquired by PepsiCo in 1966 and 1990, respectively. Sabritas markets Frito-Lay products in Mexico, including local brands such as Poffets, Rancheritos, Crujitos and Sabritones. Gamesa is the largest manufacturer of cookies in Mexico, distributing brands such as Emperador, Arcoiris and Maras Gamesa. [37]

PepsiCos Latin America Foods (Spanish: Snacks Amrica Latina) operations market and sell primarily Quakerand Frito-Lay-branded snack foods within Central and South America, including Argentina, Brazil, Peru and other countries in this region.[38] Snacks Amrica Latina purchased Peruvian company Karinto S.A.C. including its production company Bocaditas Nacionales (with three production facilities in Peru) from the Hayashida family of Lima in 2009, adding the Karito brand to its product line, including Cuates, Fripapas, and Papi Frits.[39]

[edit]PepsiCo

Americas Beverages

This division contributed 23 percent of PepsiCos net revenue as of 2009,[28] and involves the manufacture (and in some cases licensing), marketing and sales of both carbonated and non-carbonated beverages in North, Central and South America.[40] The main brands distributed under this division include Pepsi, Mountain Dew, Gatorade, 7 Up (outside the U.S.), Tropicana Pure Premium orange juice, Sierra Mist, SoBe Lifewater, Tropicana juice drinks, AMP Energy, Naked Juice and Izze. Aquafina, the companys bottled water brand, is also marketed and licensed through PepsiCo Americas Beverages.[1] PepsiCo also has formed partnerships with several beverage brands it does not own, in order to distribute these or market them with its own brands.[1] As of 2010, its partnerships include: Starbucks(Frappuccino, DoubleShot and Iced Coffee), Unilevers Lipton brand (Lipton Brisk and Lipton Iced Tea), and Dole (licensed juices and drinks). The company started a new market strategy to sell their Pepsi Cola product in Mexico, stating that about one third of the population has difficulty pronouncing "Pepsi". They started manufacturing and selling their product under the label 'Pecsi', the advertisement campaign features the Mexican soccer celebrity Cuauhtemoc Blanco. This is not the first time it has happened, back in 2009, PepsiCo used the same strategy successfully in Argentina.[41]

[edit]PepsiCo

Europe

PepsiCo began to expand its distribution in Europe in the 1980s, and in 2009 it made up 16 percent of the company's global net revenue.[28] Unlike PepsiCos Americas business segments, both foods and beverages are manufactured and marketed under one umbrella division in this region, known as PepsiCo Europe. The primary brands sold by PepsiCo in Europe include Pepsi-Cola beverages, Frito-Lay snacks, Tropicana juices and Quaker food products, as well as regional brands unique to Europe such as Walkers crisps, Copella, Paw Ridge, Snack-a-Jack, Duyvis and others. PepsiCo also distributes the soft drink 7UP in Europe via license agreement.[1] PepsiCo's European presence expanded with its acquisition of Russian juice and dairy product brand Wimm-Bill-Dann Foods in December 2010.[42]

[edit]PepsiCo

Asia, Middle East & Africa

The most recently created operating division of PepsiCo covers Asia, the Middle East and Africa. [27] In addition to the production and sales of several worldwide Pepsi-Cola, Quaker Foods and Frito-Lay beverage and food

product lines (including Pepsi and Doritos), this segment of PepsiCos business markets regional brands such as Mirinda, Kurkure and Red Rock Deli, among others.[1] While PepsiCo owns its own manufacturing and distribution facilities in certain parts of these regions, more of this production is conducted via alternate means such as licensing (which it does with Aquafina), contract manufacturing, joint ventures and affiliate operations. PepsiCos businesses in these regions, as of 2009, contributed 13 percent to the company's net revenue worldwide.[28]

[edit]Corporate

governance

Headquartered in Purchase, New York, with research and development headquarters in Valhalla, New York, PepsiCos Chairman and CEO is Indra Nooyi.[43] The board of directors is composed of eleven outside directors as of 2010, including Ray Lee Hunt, Shona L. Brown, Victor Dzau, Arthur C. Martinez, Sharon Percy Rockefeller, Daniel Vasella, Dina Dublon, Ian M. Cook, Alberto Ibargen, James J. Schiro and Lloyd G. Trotter. Former top executives at PepsiCo include Steven Reinemund, Roger Enrico, D. Wayne Calloway, John Sculley, Michael H. Jordan, Donald M. Kendall,Christopher A. Sinclair and Alfred Steele. On 1 October 2006, former Chief Financial Officer and President Indra Nooyi replaced Steve Reinemund as Chief Executive Officer. Nooyi remained as the corporation's president, and becameChairman of the Board in May 2007, later (in 2010) being named No.1 on Fortune's list of the "50 Most Powerful Women"[44] and No.6 on Forbes' list of the "World's 100 Most Powerful Women".[45]PepsiCo received a 100 percent rating on the Corporate Equality Indexreleased by the LGBT-advocate group Human Rights Campaign starting in 2004, the third year of the report.[46]

[edit]Headquarters
Main article: Donald M. Kendall Sculpture Gardens

PepsiCo headquarters

The PepsiCo headquarters are located in Purchase, New York. It was one of the last architectural works by Edward Durell Stone. It consists of seven three story buildings. Each building is connected to its neighbor through a corner. The property includes the Donald M. Kendall Sculpture Gardens with 45 contemporary sculptures open to the public. Works include those of Alexander Calder, Henry Moore, and Auguste

Rodin. Westchester Magazine stated "The buildings square blocks rise from the ground into low, inverted ziggurats, with each of the three floors having strips of dark windows; patterned pre-cast concrete panels add texture to the exterior surfaces." In 2010 the magazine ranked the building as one of the ten most beautiful buildings in Westchester County.[47] At one time PepsiCo had its headquarters in 500 Park Avenue in Midtown Manhattan, New York City.[48] In 1956 Pepsico paid $2 million for the original building.[49] PepsiCo built the new 500 Park Avenue in 1960.[50] In 1966, Mayor of New York City John Lindsay started a private campaign to convince PepsiCo to remain in New York City.[51] Six months later, the company announced that it was moving to 112 acres (45 ha) of the Blind Brook Polo Club in Westchester County.[52] After PepsiCo left the Manhattan building, it became known as the Olivetti Building.[50]

[edit]Charitable

activities

Headquarters of Pepsi-Cola Venezuela(ES)

PepsiCo has maintained a philanthropic program since 1962 called the PepsiCo Foundation, [53] in which it primarily funds nutrition and activity, safe water and water usage efficiencies, [54] and education, according to the foundations website.[55] In 2009, $27.9 million was contributed through this foundation, including grants to the United Way[56] and YMCA,[57] among others. In 2009, PepsiCo launched an initiative which the company calls the Pepsi Refresh Project,[58] in which individuals submit and vote on charitable andnonprofit collaborations.[59] The main recipients of grants as part of the refresh project are community organizations with a local focus and nonprofit organizations, such as a high school in Michigan which as a result of being selected received $250,000 in 2010 towards construction of a fitness room for high school students.[60] Following the Gulf of Mexico oil spill which occurred in the spring of 2010, PepsiCo donated $1.3 million to grant winners in determined by popular vote.[61] As of October, 2010, the company had provided a cumulative total of $11.7 million in funding, spread across 287 ideas of participant projects from 203 cities in North America.[62] In late 2010, the refresh project was reported to be expanding to include countries outside of North America in 2011.[63]

[edit]Environmental

record and product nutrition

According to its 2009 annual report, PepsiCo states that it is committed to delivering sustainable growth by investing in a healthier future for people and our planet,[28][64] which it has defined in its mission statement since 2006 as Performance with Purpose.[65][66] According to news and magazine coverage on the subject in 2010, the objective of this initiative is to increase the number and variety of healthier food and beverage products made available to its customers,[67] employ a reduction in the companys environmental impact,[68] and to facilitate diversity and healthy lifestyles within its employee base.[65] Its activities in regards to the pursuit of its goals namely environmental impacts of production and the nutritional composition of its products have been the subject of recognition from health and environmental advocates and organizations, and at times have raised concerns among its critics. As the result of a more recent focus on such efforts, critics consider (PepsiCo) to be perhaps the most proactive and progressive of the food companies", according to former New York Times food industry writer Melanie Warner in 2010.[69]

[edit]Environmental

record

[edit]Water usage (India, U.S., U.K.)


PepsiCos usage of water was the subject of controversy in India in the early and mid 2000s in part because of the companys alleged impact on water usage in a country where water shortages are a perennial issue. In this setting, PepsiCo was perceived by India-based environmental organizations as a company that diverted water to manufacture a discretionary product, making it a target for critics at the time.[70] As a result, in 2003 PepsiCo launched a country-wide program to achieve a positive water balance in India by 2009.[71] In 2007, PepsiCos CEO Indra Nooyi made a trip to India to address water usage practices in the country, prompting prior critic Sunita Narain, director of the Centre for Science & Environment (CSE), to note that PepsiCo "seem(s) to be doing something serious about water now."[70] According to the companys 2009 corporate citizenship report,[64] as well as media reports at the time,[69] the company (in 2009) replenished nearly six billion liters of water within India, exceeding the aggregate water intake of approximately five billion liters by PepsiCos India manufacturing facilities.[64] Water usage concerns have arisen at times in other countries in which PepsiCo operates. In the U.S., water shortages in certain regions resulted in increased scrutiny on the companys production facilities, which were cited in media reports as being among the largest water users in cities facing drought such as Atlanta, Georgia.[72][73] In response, the company formed partnerships with non-profit organizations such as the Earth Institute and Water.org, and in 2009 began cleaning new Gatorade bottles with purified air instead of rinsing with water, among other water conservationpractices.[74] In the United Kingdom, also in response to

regional drought conditions, PepsiCo snacks brand Walkers' reduced water usage at its largest potato chip facility by 45 percent between the years 2001 and 2008. In doing so, the factory employed machinery which captured the water naturally contained in potatoes, and used that water to largely offset the need to bring in outside water to the factory.[75][76] As a result of water reduction practices and efficiency improvements, PepsiCo in 2009 saved more than 12 billion liters of water worldwide,[77] compared to its 2006 water usage. Environmental advocacy organizations including the Natural Resources Defense Council and individual critics such as Rocky Anderson (mayor of Salt Lake City, Utah) voiced concerns in 2009, noting that the company could conserve additional water by refraining from the production of discretionary products such as Aquafina.[78] The company maintained its positioning of bottled water as healthy and convenient, while also beginning to partially offset environmental impacts of such products through alternate means, including packaging weight reduction.[78]

[edit]Pesticide regulation (India)


PepsiCos India operations were met with substantial resistance in 2003 and again in 2006, when an environmental organization in New Delhi made the claim that, based on its research, it believed that the levels of pesticides in PepsiCo (along with those from rival Coca-Cola Company), exceeded a set of proposed safety standards on soft drink ingredients that had been developed by the Bureau of Indian Standards.[79] PepsiCo denied the allegations, and India's health ministry has also dismissed the allegations both questioning the accuracy of the data compiled by the CSE, as it was tested by its own internal laboratories without being verified by outside peer review.[80][81] The ensuing dispute prompted a short-lived ban on the sale of PepsiCo and Coca-Cola Company soft drinks within India's southwestern state of Kerala in 2006;[82] however this ban was reversed by the Kerala High Court one month later.[83] In November, 2010, the Supreme Court of India invalidated a criminal complaint filed against PepsiCo India by the Kerala government, on the basis that the beverages did meet local standards at the time of the allegations. The court ruling stated that the percentage of pesticides found in the tested beverages was within the tolerance limits subsequently prescribed in respect of such product, since at the time of testing there was no provision governing pesticide adulteration in cold drinks.[84][85] In 2010, PepsiCo was among the 12 multinational companies that displayed the most impressive corporate social responsibility credentials in emerging markets, as determined by the U.S. Department of State.[86] PepsiCo's India unit received recognition on the basis of its water conservation and safety practices and corresponding results. [87]

[edit]Packaging and recycling


Environmental advocates have raised concern over the environmental impacts surrounding the disposal of PepsiCos bottled beverage products in particular, as bottle recycling rates for the companys products in 2009 averaged 34 percent within the U.S.[88] The company has employed efforts to minimize these environmental impacts via packaging developments combined with recycling initiatives. In 2010, PepsiCo announced a goal to

create partnerships that prompt an increase the beverage container recycling rate in the U.S. to 50 percent by 2018.[89] One strategy enacted to reach this goal has been the placement of interactive recycling kiosks called Dream Machines in supermarkets, convenience stores and gas stations, with the intent of increasing access to recycling receptacles.[90][91] The use of resin to manufacture its plastic bottles has resulted in reduced packaging weight, which in turn reduces the volume of fossil fuels required to transport certain PepsiCo products. The weight of Aquafina bottles was reduced nearly 40 percent, to 15 grams, with a packaging redesign in 2009. Also in that year, PepsiCo brand Naked Juice began production and distribution of the first 100 percent postconsumer recycled plastic bottle.[92]

[edit]Energy usage and carbon footprint


PepsiCo, along with other manufacturers in its industry, has drawn criticism from environmental advocacy groups for the production and distribution of plastic product packaging, which consumed an additional 1.5 billion US gallons (5,700,000 m3) of petrochemicals in 2008. These critics have also expressed apprehension over the production volume of plastic packaging, which results in theemission of carbon dioxide.[93] Beginning largely in 2006, PepsiCo began development of more efficient means of producing and distributing its products using less energy,[94] while also placing a focus on emissions reduction.[93] In a comparison of 2009 energy usage with recorded usage in 2006, the companys per-unit use of energy was reduced by 16 percent in its beverage plants and 7 percent in snack plants.[64] In 2009, Tropicana (owned by PepsiCo) was the first brand in the U.S. to determine the carbon footprint of its orange juice product, as certified by the Carbon Trust, an outside auditor of carbon emissions.[95] Also in 2009, PepsiCo began the test deployment of so-called green vending machines, which reduce energy usage by 15 percent in comparison to average models in use. It developed these machines in coordination with Greenpeace, which described the initiative as transforming the industry in a way that is going to be more climate-friendly to a great degree.[95]

[edit]Product

nutrition

[edit]Product diversity
From its founding in 1965 until the early 1990s, the majority of PepsiCos product line consisted of carbonated soft drinks and convenience snacks. PepsiCo broadened its product line substantially throughout the 1990s and 2000s with the acquisition and development of what its CEO deemed as good-for-you products, including Quaker Oats, Naked Juice and Tropicana orange juice.[96] Sales of such healthier-oriented PepsiCo brands totaled $10 billion in 2009, representing 18 percent of the companys total revenue in that year. This movement into a broader, healthier product range has been moderately well received by nutrition advocates;

though commentators in this field have also suggested that PepsiCo market its healthier items as aggressively as less-healthy core products.[97] In response to shifting consumer preferences and in part due to increasing governmental regulation, PepsiCo in 2010 indicated its intention to grow this segment of its business, forecasting that sales of fruit, vegetable, whole grain and fiber-based products will amount to $30 billion by 2020.[98][99] To meet this intended target, the company has said that it plans to acquire additional health-oriented brands while also making changes to the composition of existing products that it sells.[99]

[edit]Ingredient changes
Public health advocates have suggested that there may be a link between the ingredient makeup of PepsiCos core snack and carbonated soft drink products and rising rates of health conditions such as obesity and diabetes. The company aligns with personal responsibility advocates, who assert that food and beverages with higher proportions of sugar or salt content are fit for consumption in moderation by individuals who also exercise on a regular basis.[100] Changes to the composition of its products with nutrition in mind have involved reducing fat content, moving away from trans-fats, and producing products in calorie-specific serving sizes to discourage overconsumption, among other changes.[67] One of the earlier ingredient changes involved sugar and caloric reduction, with the introduction of Diet Pepsi in 1964 and Pepsi Max in 1993 both of which are variants of their full-calorie counterpart, Pepsi. More recent changes have consisted of saturated fat reduction, which Frito-Lay reduced by 50% in Lay's and Ruffles potato chips in the U.S. between 2006 and 2009.[100] Also in 2009, PepsiCos Tropicana brand introduced a new variation of orange juice (Trop50) sweetened in part by the plant Stevia, which reduced calories by half.[100]Since 2007, the company also made available lower-calorie variants of Gatorade, which it calls G2.[101]

[edit]Distribution to children
As public perception placed additional scrutiny on the marketing and distribution of carbonated soft drinks to children, PepsiCo announced in 2010 that by 2012, it will remove beverages with higher sugar content from primary and secondary schools worldwide.[102] It also, under voluntary guidelines adopted in 2006, replaced full-calorie beverages in U.S. schools with lower-calorie alternatives, leading to a 95 percent reduction in the 2009 sales of full-calorie variants in these schools in comparison to the sales recorded in 2004.[103] In 2008, in accordance with guidelines adopted by the International Council of Beverages Associations, PepsiCo eliminated the advertising and marketing of products that do not meet its nutrition standards, to children under the age of 12.[104][105] In 2010, First Lady Michelle Obama initiated a campaign to end childhood obesity (titled Let's Move!), in which she sought to encourage healthier food options in public schools, improved food nutrition labeling and

increased physical activity for children. In response to this initiative, PepsiCo, along with food manufacturers Campbell Soup, Coca-Cola, General Mills and others in an alliance referred to as the "Healthy Weight Commitment Foundation", announced in 2010 that the companies will collectively cut one trillion calories from their products sold by the end of 2012 and 1.5 trillion calories by the end of 2015.[106]