Tag Archive | "PepsiCo"

PepsiCo sets sugar reduction targets


PepsiCo has announced ambitious plans to dramatically reduce the sugar content in its drinks as part of its sustainable growth strategy for 2025.

These goals aim to continue “transforming PepsiCo’s food and beverage product portfolio”.

Its goals include: At least two-thirds of its global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-oz serving by 2025; at least three-quarters of its global foods portfolio volume will not exceed 1.3 milligrams of sodium per calorie by 2025; and the company will provide access to at least three billion servings of nutritious foods and beverages to underserved communities and consumers.

PepsiCo CEO Indra Nooyi says: “We have mapped our plans against the United Nations Sustainable Development Goals, and we believe the steps we are taking will help lift PepsiCo to even greater heights in the year ahead. Companies like PepsiCo have a tremendous opportunity – as well as a responsibility – to not only make a profit, but to do so in a way that makes a difference in the world.”

Also included in their sustainability targets are commitments to significantly reduce carbon emissions, particularly those related to agriculture and packaging. Other elements of the plan include increased efforts in water preservation, sustainable sourcing of crops and the reduction of waste.

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PepsiCo faces US lawsuit over misleading packaging


PepsiCo are set to face a lawsuit in the US relating to its marketing of its Naked Juice range. They complainants allege that PepsiCo “misleadingly markets Naked Juice as predominantly containing high-value ingredients such as acai berry and kale, when the predominant ingredient is usually cheap, nutrient-poor apple juice.”

The Center for Science in the Public Interest (CSPI) claims that the drink’s packaging is misleading. They point to Kale Blazer, which features in the Naked Juice range as an example of this. The label features leaves of kale and cucumber slices. The caption reads “Kale is king of the garden” and the label also references the inclusion of cucumber, spinach, celery and ginger. The primary ingredient, however, in Kale Blazer is orange juice, with apple juice the third most common ingredient.

The CSPI says: “Advertisements for the product on social media and elsewhere similarly exaggerate the presence of kale in the product. Outdoor advertising for Kale Blazer has included statements such “have your kale and drink it too”, implying that the product is predominantly, if not exclusively, kale.”

The claimants in the lawsuit allege that, by naming these drinks after a food or ingredient perceived to be highly nutritious, PepsiCo are being “false and misleading because the ingredients do not have the ingredient profile represented.” Instead, say the claimants, the drinks are made up of cheaper and less nutritious ingredients.

For its part, PepsiCo completely refutes the claims. It says: “This is a baseless lawsuit. There is nothing misleading about our Naked Juice products. Every bottle of Naked Juice clearly identifies the fruit and vegetables that are within. For example, the label on our Kale Blazer juice accurately indicates each bottle contains 5 ¾ Kale leaves.”

The CSPI has filed a suit alongside law firm Reese LLP, in the US District Court for the Eastern District of New York this week, ‘on behalf of customers in California and New York’.

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PepsiCo to re-launch Diet Pepsi


diet-pepsi-splenda.0.0PepsiCo Inc. is bringing back its old Diet Pepsi formula less than a year after phasing it out.

Diet Pepsi was reformulated in August 2015 to drop the artificial sweetener aspartame and it will be sold in its old recipe as Diet Pepsi Classic Sweetener blend in retro packaging, PepsiCo said earlier this 1Tbb—atfc..,– week. As part of a broader revamp of its diet-cola lineup, the company also is renaming Pepsi Max as Pepsi Zero Sugar in the US to more clearly show that the beverage has zero calories.

While PepsiCo says that Diet Pepsi without aspartame will continue to be the company’s primary diet cola, reviving the drink’s old recipe signals that the new version, in a bid to win over consumers wary of aspartame, hasn’t been a hit. Diet Pepsi’s sales volume fell 5.8 percent in 2015 and dropped roughly 11 percent at retail during the first quarter of 2016, according to data from Beverage Digest, which reported on the changes earlier.

“When you change the taste of a product that people rely on for consistency of taste, that can have pretty damaging brand effects,” said Adam Fleck, an analyst at Morningstar Inc. “You always want to be right, but when the market is telling you that your product is not right for what they want – or certainly less than before – you have to make that shift.”

The shares fell 0.4 percent to $101.55 at 10:54 a.m. in New York. PepsiCo, based in Purchase, New York, had gained 2.1 percent this year through the end of last week.

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Muller and PepsiCo Commence US Factory Construction


Muller Quaker Dairy, a joint venture between PepsiCo, and the Theo Muller Group, has started construction of a 350,000-square foot state-of-the-art yogurt manufacturing facility on an 82-acre parcel of land in Batavia, New York. The site is situated in one of the US’s most concentrated milk-producing and processing regions. The first phase of construction is scheduled to be completed in 2013.

Muller Quaker Dairy entered the US dairy market last month with innovative premium yogurt products. It is the first entry by both PepsiCo and Muller into US dairy aisles. The products – Müller Corner, Müller Greek Corner and Müller FrütUp – are initially being sold through supermarket and club retailers in the Northeast and Mid-Atlantic.

“We’re excited to introduceU.S.consumers to the types of products that have made Müller a household name in many countries around the world,” says Stefan Muller, board member of Theo Muller Group. “Our joint efforts with PepsiCo will open the door to new yogurt options that we are confident consumers are going to love.”

In addition to building the Batavia facility, Muller Quaker Dairy will source its milk supply from US dairy farmers, with the majority coming from New York State and Northeast region dairy farms. According to data from Euromonitor, demand for value-added dairy is expected to increase in the coming years. In the US, variety and innovation within the yogurt category lags behind other regions, especially Europe. US consumption of yogurt and other value-added dairy products is generally less than half that of Europe.

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PepsiCo and Muller Enter US Dairy Market With European-style Yogurt


Muller Quaker Dairy, the US joint venture between PepsiCo and Theo Muller Group, is entering the growing US dairy market with innovative premium yogurt products. These products – Muller Corner, Muller Greek Corner and Muller FrutUp – mark the first entry by either PepsiCo or Muller into US dairy aisles.

Together, PepsiCo and Muller will complement each other’s strengths and are expected to drive growth for both companies. PepsiCo brings scale as the largest food and beverage business in the US and has unmatched innovation-driven research and development programs, a robust go-to-market system, and superior marketing and brand recognition across its portfolio of 22 billion-dollar brands. Muller has decades of category leading innovation and dairy expertise, having grown to become Germany’s largest privately held dairy business, and one of Europe’s most well-known yogurt producers.

Muller Quaker Dairy aims to satisfy the increasing demand for value-added dairy products in the US, where variety and innovation within the category lags behind other regions, especially Europe. US consumption of yogurt and other value-added dairy products is generally less than half that of Europe.

The joint venture is building a new, state-of-the-art yogurt manufacturing plant in Batavia, New York. Once completed in 2013, it will be one of the largest yogurt plants in the US, and is expected to create more than 180 new jobs in upstate New York.

Worldwide, the dairy category is expected to grow more than any other through 2016, exceeding the growth of the next two food and beverage categories combined. This growth is driven by the progressively increasing consumer demand for packaged milk, yogurt and other value-added dairy products, and for other products containing dairy protein, probiotics, and calcium.

PepsiCo already holds a strong position in the global dairy products business. The company acquired Wimm-Bill-Dann, Russia’s largest dairy company, in 2011 and has been part of a successful joint venture with Almarai, Saudi Arabia’s largest dairy company, since 2009. PepsiCo has a previously stated goal of growing its global nutrition portfolio to $30 billion in revenue by 2020.

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PepsiCo Announces 40th Consecutive Annual Dividend Increase


PepsiCo has declared a four percent rise in its annual dividend, from the current annual rate of $2.06 to $2.15 per share – marking the group’s 40th consecutive annual dividend increase. “PepsiCo is focused on delivering sustainable long-term growth and strong cash returns to shareholders,” says PepsiCo chairman and chief executive Indra Nooyi. “The board’s decision to increase our annual dividend demonstrates the confidence we have in the fundamental strength of PepsiCo’s business and our future growth prospects.”

Since the start of 2002, PepsiCo has returned more than $50 billion to shareholders in the form of dividends and share repurchases. The company expects to return more than $6 billion to shareholders in 2012.

PepsiCo has net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. Its main businesses are Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola.

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PepsiCo Finalises Strategic Alliance in China


PepsiCo has completed its a strategic beverage alliance in China with Tingyi (Cayman Islands) Holding, one of the leading food and beverage companies in China. China is projected to become the world’s largest beverage market by 2015. The alliance was approved by the shareholders of Tingyi in February and has now received regulatory approval.

As part of the alliance, Tingyi’s beverage subsidiary – Tingyi-Asahi Beverages Holding (TAB), one of the country’s leading beverage manufacturers – is now PepsiCo’s franchise bottler in China. TAB will partner with PepsiCo’s current bottlers to manufacture, sell and distribute PepsiCo’s carbonated soft drink and Gatorade brands. In addition, PepsiCo and TAB will begin co-branding their respective juice drink brands using the Tropicana brand name under license from PepsiCo. PepsiCo will retain branding and marketing responsibilities for these products.

Under the terms of the alliance, PepsiCo has contributed its indirect equity interests in its company-owned and joint venture bottling operations in China to TAB and received as consideration a 5% indirect equity interest in TAB. PepsiCo has an option to increase its indirect holding in TAB to 20% at its sole discretion by 2015. The shareholdings of PepsiCo’s existing Chinese joint venture partners in the joint venture bottling operations will not change as a result of the transaction.

“China will soon surpass the United Statesto become the largest beverage market in the world. As a result of this new alliance with Tingyi, PepsiCo is extremely well positioned for long-term growth in China,” says PepsiCo chairman and chief executive Indra Nooyi. “Tingyi is an outstanding operator with a proven track record of success. By leveraging the complementary strengths of each company, we’ll be able to significantly enhance our beverage business in China, reach millions of new consumers throughout the country, and create value for Tingyi and PepsiCo shareholders.”

This transaction involves the companies’ respective mainland China beverage operations. Both PepsiCo and Tingyi will continue to independently operate their respective food businesses.

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PepsiCo Potato Chip Brands Surpass $10 Billion in Global Retail Sales


PepsiCo’s global ‘Banner Sun’ potato chip portfolio has grown to more than $10 billion in annual retail sales, anchored by Lay’s, the world’s largest food brand and the number one potato chip brand globally. The ‘Banner Sun’ logo – which appears on packaging for leading brands such as Lay’s, Walkers, Smith’s and Sabritas – has grown into a symbol for quality potato chips around the world. Lay’s and Walkers are among PepsiCo’s portfolio of 22 billion-dollar food and beverage brands, a number that has doubled since 2000 – further illustrating the strength of the company’s worldwide food and beverage business.

Expansion into international markets has driven the success of PepsiCo’s potato chip portfolio, with about 60 percent of ‘Banner Sun’ sales coming from outside North America. The top 10 markets are: the United States, United Kingdom, Russia, Canada, Spain, Australia, China, Mexico, Netherlands and India.

“PepsiCo continues to focus on growing its largest food and beverage brands, and this milestone is another example of how our efforts are paying off,” says Salman Amin, PepsiCo’s chief marketing officer. “Whether it’s Lay’s, Walkers, Smith’s or Sabritas, PepsiCo has built some of the world’s strongest brands that are loved by consumers around the globe.”

PepsiCo uses culinary insights to tailor its chips to the local tastes of consumers in diverse markets around the world, with current best-sellers including Lay’s Magic Masala in India, Lay’s Red Caviar in Russia, Lay’s Numb & Spicy Hot Pot in China, Lay’s Cheese & Onion in the United Kingdom, Sabritas Adobadas (tomato & chili) in Mexico and Lay’s Classic in the United States.

PepsiCo has leveraged its global brand building strength to connect with consumers in meaningful ways and drive the growth of the ‘Banner Sun’ portfolio worldwide. For example, with the ‘Do Us A Flavour’ campaign, which first launched in the United Kingdomin 2008, PepsiCo was among the first companies to co-create new products with consumers by using traditional and social media to invite people to submit their ideas for new flavors of potato chips. PepsiCo has launched this campaign in 30 countries to date.

As one of the largest seed-to-shelf companies in the world, PepsiCo sources more than four million tons of potatoes a year for its products. The company works with local farmers to understand every aspect of the growing process and ensure a consistent supply of high-quality potatoes needed to make the chips consumers know and love.

PepsiCo has one of the world’s most powerful go-to-market systems, operating more than 100,000 routes, serving approximately 10 million outlets every week and generating over $300 million in retail sales every day. This ability to make, sell and deliver its products on such a large global scale has been instrumental to the growth of the ‘Banner Sun’ portfolio. Frito-Lay North America was one of the first companies to adopt a system for direct-store-delivery, enabling the company to reach more than 500,000 retail customers each week.

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PepsiCo Unveils New Global Structure and Leadership to Drive Continued Growth


In its quest to become a fully integrated, global food and beverage company, PepsiCo has announced a new global structure and strengthened its management team. In the new structure, while the regions – PepsiCo Americas Beverages, PepsiCo Americas Foods, PepsiCo Middle East and Africa, and PepsiCo Europe – retain ownership of the P&L, PepsiCo’s global groups will work across the regions to fully leverage the power and scale of the company. Consistent with this shift, PepsiCo has made two leadership changes.

Brian Cornell, chief executive of PepsiCo Americas Foods.

Former PepsiCo executive Brian Cornell has rejoined the company as chief executive of PepsiCo Americas Foods. He most recently was president and chief executive of Sam’s Club, a division of Wal-Mart Stores. Current PepsiCo Americas Foods chief executive John Compton has been promoted to the newly created position of president of PepsiCo.

As chief executive of PepsiCo Americas Foods, Brian Cornell will report to PepsiCo chairman and chief executive Indra Nooyi and be responsible for Frito-Lay North America, Quaker Foods & Snacks North America, PepsiCo Mexico, South America Foods, PepsiCo customer teams and all Power of One activities within the Americas.

John Compton has been promoted to the newly created position of president of PepsiCo.

As president of PepsiCo, John Compton will continue to report to Indra Nooyi and assume responsibility for all of PepsiCo’s existing global category groups (Global Beverages, Global Snacks and Global Nutrition), Global Operations (IT, Global Procurement, Supply Chain and Productivity), Global Marketing Services and Corporate Strategy.

Working with the regional sectors, John Compton will be responsible for driving breakthrough innovation, and brand building while looking for ways to significantly reduce the overall cost structure of the company.

“This executive position will serve as a key driver for our long-term growth strategy,” says Indra Nooyi. “A 28-year PepsiCo veteran, John brings a unique insight to this critical role. I have absolute confidence in John’s ability to work productively with the sector CEOs to bring about a step-change for PepsiCo’s growth and profitability.”

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PepsiCo Given 2012 Energy Star Sustained Excellence Award


The US Environmental Protection Agency (EPA) has awarded PepsiCo’s US operations a 2012 Energy Star Sustained Excellence Award in recognition of the soft drinks and snacks manufacturer’s continued leadership in protecting the environment through energy efficiency. PepsiCo, which has been recognised by the Energy Star programme since 2006, is being honoured for its long-term commitment to energy efficiency.

After more than a decade, the cumulative effects of PepsiCo’s resource conservation program have resulted in an improvement in energy efficiency of more than 30%. Further, PepsiCo avoided the emissions of over 600,000 metric tons of greenhouse gasses in 2011, which is equivalent to the energy consumption of over 50,000 American single-family homes and over 115,000 passenger vehicles.

The 2012 Sustained Excellence Awards are given to a select group of organisations that have exhibited outstanding leadership year after year. These winners have reduced greenhouse gas emissions by setting and achieving aggressive goals, employing innovative approaches, and showing others what can be achieved through energy efficiency. Award winners are selected from about 20,000 organizations that participate in the Energy Star program.

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PepsiCo Opens New €10 Million Irish R&D Centre


PepsiCo Ireland has officially opened its new R&D Centre for next generation products in Little Island, County Cork. It represents an investment of €10 million in PepsiCo’s Irish operations. 

PepsiCo Ireland, part of PepsiCo Worldwide Flavours, commenced operations in Little Island in 1974 to manufacture beverage concentrates for European markets. In 2003, a €100 million manufacturing and services facility based in Carrigaline,County Cork was opened. In 2006, a regional R&D centre and PepsiCo’s Worldwide Flavours headquarters were established in Ireland.

Currently employing 18 people, all with PhD, MSc and Bachelor Degreees in Food Science, Chemistry and Engineering, the new R&D Centre will play a key role in PepsiCo’s strategy for growth across its global business. The company employs 600 people in Ireland across a diverse range of business activities including manufacturing, finance, business information and shared services.

The new R&D facility is intended to allow PepsiCo to create a critical, sustainable competitive advantage through new and innovative products, ensuring its next generation products meet consumer needs in the future.

Mike Engler, senior vice president and general manager of PepsiCo Worldwide Flavours, says: “Having seen at first hand the tremendous work and results achieved by the Ireland R&D team over the past five years, I have no doubt that this new state-of-the-art facility will serve to further enhance their contribution, ensuring PepsiCo is better placed than ever before to deliver breakthrough innovation globally.”

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PepsiCo and Theo Muller to Build $206 Million Yogurt Factory


PepsiCo, the world’s second largest snacks and beverages company, and Theo Muller, Germany’s largest privately owned dairy business, have chosen New York as the site for their first yogurt production facility in the US. Through their joint venture, Wave, the companies will invest $206 million (Eur153 million) and create 186 new manufacturing and support jobs to operate the new state-of-the-art facility in Batavia.

Wave considered other locations both in and outside of New York State for the facility. After a thorough evaluation, including an assessment of access to dairy resources, water supply and distribution routes to key markets, the company chose Batavia. While the facility is being developed over two years, Wave may import Muller products in order to establish a foothold in the fast-growing US yogurt business.

Wave’s investment continues a strong recent trend of major yogurt producers opening manufacturing facilities in New York. The state currently has 29 yogurt plants, which employ more than 2,000 people and produced a total of 530 million pounds of yogurt in 2011—a 43% increase from 2010 and more than double 2008 levels.

New York State is the US leader in the production of the highly popular Greek-style yogurt. Producing Greek yogurt requires approximately three times the amount of milk than traditional yogurt, making the industry a major economic driver for dairy farmers across New York State. In 2011, more than 1.166 billion pounds of milk was used for yogurt production. This is comparable to the milk production of 500 average-size dairy farms inNew York State (115 cows/farm).

The joint venture with Muller reflects PepsiCo’s ambitions to expand in dairy. In 2010, the beverages and snacks manufacturer acquired Russian dairy and fruit juice company Wimm-Bill-Dann for $5.4 billion. PepsiCo also established a joint venture with Almarai, the leading dairy company in the Middle East, in 2009.

Muller is the leader in the UK yogurt market through its Muller Corner brand.

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Pepsico to Invests £14.4 Million in Quaker Oats Site in Scotland


PepsiCo is investing £14.4 million to increase the capacity of its Quaker Oats site at Cupar in Scotland in a move that will bring 30 jobs to the local area. The investment, which builds on last year’s £8.5 million spend, makes a total of £51 million that parent company PepsiCo has spent on the site over the past decade to meet the surge in consumer demand for porridge.

With the UK porridge market now worth £157 million, the hot cereal market has grown by 30% over the past two years. For PepsiCo, the public’s appetite for quick and easy porridge has helped drive growth with value sales of its Oat So Simple sachets increasing 44% over the last two years. In addition to growth in the UK, PepsiCo has also seen its oats exports rise by 18% over the past five years as demand for Quaker Oats increases in the Middle East.

“More and more people are eating porridge all year round and our investment at Cupar means we’ll be able to satisfy the increasing demand at home and abroad for years to come,” comments Richard Evans, president of PepsiCo UK, Ireland & South Africa. “The porridge market has seen phenomenal growth and what’s particularly interesting is that more and more people are opting for hot cereals for breakfast all year round – whatever the weather. Overseas demand for our oats is also increasing, and we see this as a key area for future growth. Quaker has been milling oats at Cupar since 1947 and we are very pleased to invest again in our site to protect its heritage and grow the Quaker Oats business.”

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Major Restructuring at PepsiCo to Maintain Profitable Growth


With worldwide snacks and beverage volumes rising by 8% and 5% respectively, PepsiCo has increased operating profit by 16% to $9.63 billion on net revenue up 15% to $66.5 million for 2011. Reported net income rose by 2% to $6.46 billion.

The results reflect top-line gains across its worldwide snacks and beverage businesses, the acquisition of Wimm-Bill-Dann in Russia, gains from sales of certain businesses and the favorable impact of an extra reporting week offset by high commodity costs.

“In 2011, we delivered solid top- and bottom-line growth,” says PepsiCo chairman and chief executive Indra Nooyi. “We continued to stimulate strong consumer demand for our products, and our successful pricing and productivity programs partially offset the impacts of inflation. Importantly, in a year characterised by a challenging macroeconomic environment and political turbulence, we took advantage of gains from strategic adjustments to our portfolio to reinvest in key capabilities and markets.”

Full-year worldwide snacks volume increased 2.5% on an organic basis, reflecting broad-based gains in the snacks portfolio. Full-year worldwide beverage volume increased 1% on an organic basis. The volume performance was led by growth in emerging markets, where volume increased 8% in snacks and 3% in beverages on an organic basis.

In Europe, volume increased in double-digits for both snacks and beverages, including the impact of the WBD acquisition. Net revenue increased by 41%, and by 12% excluding the impact of the WBD acquisition. Full-year operating profit advanced by 18%.

PepsiCo chairman and chief executive Indra Nooyi.

To maintain its growth momentum, PepsiCo has unveiled a major restructuring and productivity program with the savings being invested in its brands. Entailing the shedding of about 8,700 jobs or 3% of the global workforce, PepsiCo’s new multi-year productivity program is expected to generate $1.5 billion of incremental cost savings by 2014 through optimisation of operating practices and organisation structure. PepsiCo plans to increase advertising and marketing support behind its global brands by $500-$600 million in 2012, with particular focus on North America. Going forward, it expects to maintain or increase that rate of support as a percentage of revenues.

As a result of the productivity programme, PepsiCo incurred pre-tax non-core restructuring charges of $383 million in the fourth quarter of 2011 and it anticipates additional charges of approximately $425 million in 2012 and another $100 million from 2013 through 2015. These charges resulted in cash expenditures of $30 million in the fourth quarter of 2011, and the company anticipates approximately $550 million of related cash expenditures during 2012, with the balance of approximately $175 million of related cash expenditures in 2013 through 2015.

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PepsiCo Extends $1 Billion Dollar Brands Portfolio


PepsiCo has expanding its portfolio of brands, which each generate more than $1 billion in annual retail sales, to 22 with the recent addition of Diet Mountain Dew, Brisk and Starbucks ready-to-drink (RTD) beverages. The US-based beverages and snacks giant has doubled the size of its billion-dollar brand portfolio since 2000, adding five new billion-dollar brands in the past five years.

First introduced in 1988, Diet Mountain Dew became the company’s eighth carbonated soft drink brand to reach the billion-dollar annual retail sales milestone. PepsiCo has manufactured and distributed Brisk and Starbucks RTD beverages through successful joint venture partnerships with Unilever and Starbucks, respectively, since the early 1990s.

Brisk is sold under the Pepsi Lipton Tea Partnership, a successful joint venture formed between PepsiCo and Unilever in 1991 focused on manufacturing and marketing ready-to-drink tea beverages. PepsiCo, through the Pepsi Lipton Tea Partnership, is the RTD tea category leader in several markets around the world, including the US and Western and Eastern Europe. 

PepsiCo and Starbucks largely created the North American RTD coffee category in 1994 when they formed the North American Coffee Partnership, a successful joint venture under which PepsiCo manufactures and distributes Starbucks RTD, single-serve coffee beverages.

The growth of Diet Mountain Dew, Brisk and Starbucks RTD beverages gives PepsiCo 14 billion-dollar beverage brands.

“Our ability to accelerate the growth of our billion-dollar brand portfolio with Diet Mountain Dew, Brisk and Starbucks reflects the success of our product marketing and innovation initiatives, the strength of our joint venture partnerships and the power of our distribution systems,” says Indra Nooyi, chairman and chief executive of PepsiCo. “We remain laser focused on continuing to strengthen and grow our entire global brand portfolio.”

PepsiCo also has eight billion-dollar food brands, the largest of which is Lay’s. The growth of the Lay’s portfolio has been driven by expansion in many international markets, including several key emerging economies like Russia, where Lay’s is getting ready to celebrate its 20th anniversary.

The company’s billion-dollar brand portfolio is comprised of: Aquafina, Brisk, Cheetos, Diet Mountain Dew, Diet Pepsi, Doritos, Fritos, Gatorade, Lay’s, Lipton, Mirinda, Mountain Dew, Pepsi, Pepsi Max, Ruffles, Quaker, 7UP (outside the US), Sierra Mist, Starbucks RTD beverages, Tostitos, Tropicana and Walkers.

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PepsiCo and Ocean Spray Announce Strategic Alliance in Latin America


PepsiCo and Ocean Spray Cranberries have formed a strategic alliance in Latin America. As part of the alliance, PepsiCo will have exclusive rights to manufacture and distribute a portfolio of cranberry- and blueberry-based beverages through its Latin America Beverages division. The companies will share marketing responsibilities for the products and intend to collaborate on product innovation.

PepsiCo and Ocean Spray have enjoyed a successful business relationship in the US since 2006, when Ocean Spray’s single-serve juices and juice drinks entered the PepsiCo bottling system. Ocean Spray is an agricultural co-operative owned by more than 700 cranberry growers in the US and Canada as well as more than 50 Florida grapefruit growers. With sales of over $2 billion, Ocean Spray is North America’s leading producer of canned and bottled juices and juice drinks, and has been the best-selling brand name in the canned and bottled juice category since 1981.

The Latin America alliance between PepsiCo and Ocean Spray includes key countries in the Caribbean, Central America and South America and has a term of 20 years.  Financial terms of the transaction were not disclosed.

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PepsiCo Enters Strategic Alliance in China


PepsiCo has agreed to form a strategic alliance with Tingyi Holding, one of the major food and beverage companies in China. Tingyi’s beverage subsidiary, Tingyi-Asahi Beverages Holding (TAB), will become PepsiCo’s franchise bottler in China. TAB, whose product offerings include ready-to-drink tea, bottled water and juice beverages, is one of the leading beverage manufacturers in China.

 

PepsiCo currently operates its China beverage business through 24 company-owned and joint venture bottling operations. Upon approval of the transaction, PepsiCo will transfer its indirect equity interests in the bottlers to TAB, and will receive as consideration a 5% indirect equity interest in TAB. PepsiCo will also have an option to increase its indirect equity interest in TAB to 20% by 2015, when China is projected to become the world’s largest liquid refreshment beverage market.

 

The transaction is subject to regulatory approval in China and the approval of the shareholders of Tingyi, which is a listed company on the Hong Kong Stock Exchange.

 

Indra Nooyi, chairman and chief executive of PepsiCo,

The shareholdings of PepsiCo’s existing Chinese joint venture partners in the joint venture bottling operations will not change as a result of the transaction. Under the new alliance, TAB will partner with PepsiCo’s current bottlers to manufacture, sell and distribute PepsiCo’s carbonated soft drink and Gatorade brands. PepsiCo will retain branding and marketing responsibilities for these products.

 

TAB also will begin co-branding its juice products under the Tropicana brand name under a license from PepsiCo. TAB and PepsiCo’s current bottlers will have the sole rights to distribute PepsiCo’s branded beverage products in China. In addition, PepsiCo will provide the alliance access to its global beverage innovation pipeline.

 

“To win globally, we need to have absolutely the best business partners locally,” says PepsiCo’s chairman and chief executive Indra Nooyi. “Tingyi has a history of successful partnerships with other companies, and we believe this proposed alliance will combine Tingyi’s superb distribution reach with PepsiCo’s innovation prowess, significantly enhancing our beverage business in China in the near term while maximizing PepsiCo’s future growth potential in the fastest growing beverage market in the world.”

 

In China, while converting its beverage business to its globally prevalent franchise model, PepsiCo will continue to independently operate its successful food business.

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PepsiCo Expands in Brazil


Reflecting its strategy of expanding in emerging markets, PepsiCo is reported to have acquired Mabel, one of Brazil’s leading biscuit manufacturers, in a deal worth between 800 million and 900 million reals ($460-517 million). PepsiCo is believed to have outbid international food group Bunge and Mexican bread maker Grupo Bimbo to secure Mabel.

 

Mabel operates five plants acrossBraziland produces 1.5 million packs of biscuits a day. The Brazilian biscuit and cracker market was worth about 6.6 billion reals in 2010.

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PepsiCo Selects Ten of Europe’s Most Promising Technology Start-ups


PepsiCo has selected the ten start-up companies from across Europe that will make up PepsiCo10 – a programme designed to discover and support emerging technology companies. Chosen from submissions of more than 130 impressive and innovative technologies, the 10 winners will now work with some of PepsiCo’s leading brands in the UK, including Walkers and Pepsi, to activate pilot marketing programmes, whilst receiving the support and mentorship of Highland Capital Partners, OMD, Mashable and Wired.

 

The selected PepsiCo10 start-ups in Europe include a wide range of social commerce and mobile technologies. They are:

* SDMV (Slingshot Shopping) (UK): is the work of two recent university graduates who have created a programme set to revolutionise digital commerce by allowing consumers to instantly place products in their existing online shopping baskets from any website, Facebook page or mobile device, at just the tap of a mouse.

* Shahmoon Ltd (UK): uses 46″ HD video posters to bring big-screen advertising to small scale stores, enabling businesses to interact with passers-by, feed live information or ‘tweet’ direct to the street.

* TvTak Ltd (France): is a mobile app, which lets users access additional content about a TV show or commercial they’re watching by pointing their smartphone or tablet at the TV for one second.

* SoDash Ltd (UK): is a social media monitoring tool which uses Artificial Intelligence to help companies manage their brand reputations, whilst also monitoring consumer insight and responses to their brand activity.

* Sports Team Space (Bluefields) (UK): is a social network helping hundreds of amateur football clubs across the country easily manage their leagues, teams and subsidies online.

* ParcelPoke (ParcelGenie) (UK): is the world’s first instant gift text messaging service that makes sending real products to friends and family as simple as sending a text message.

* ChartsNow.mobi Limited (UK): is an innovative and unique mobile music service that offers consumers instant access to the most current, hit chart music 24/7 on the majority of music enabled mobile phones.

* Screenreach Interactive limited (Screach) (UK): offers a unique platform that allows consumers to use the smart phone as a device to create real-time two way interactive experiences with public digi-screens or the mobile device itself. For instance, using mobile phones as a controller to play a game.

* Roamler BV (Netherlands):  uses a network of consumers as a mobile “workforce,” enabling them to earn rewards by performing small tasks on behalf of corporations, organisations and individuals.

* Waxwired Ltd (Flypost) (UK): is a location based smart phone game that lets users discover and interact in real-time with live events happening in their city.

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Kraft Foods Chief is the Most Powerful Woman in Business


Irene Rosenfeld (pictured), chairman and chief executive of Kraft Foods, has overtaken Indra Nooyi, to top Fortune Magazine’s annual ranking of the ‘50 Most Powerful Women in Business’. In second position in 2010, Irene Rosenfeld made the headlines this year with her decision to split Kraft Foods into two companies.

 

Indra Nooyi has continued to develop PepsiCo’s nutritional products portfolio with the aim of growing it into a $30 billion business by 2020. However, she has been critised for losing ground to arch rival Coca-Cola in the North American soft drinks market.

 

Patricia Woertz, chairman, chief executive and president of Archer Daniels Midland is third in the listing. Denise Morrison, the new president and chief executive of Campbell Soup, is ranked 21st.

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PepsiCo Creates Global Snacks Group


PepsiCo is creating the Global Snacks Group (GSG), designed to drive breakthrough innovation across its leading portfolio of global snack food brands. The US-based beverages and snacks group has also announced the formation of the Power of One – Americas Council, which brings together its top food and beverage leaders to leverage the combined scale of the company’s complementary snack and beverage businesses across North, South and Central America.

 

Both initiatives will be led by John Compton, chief executive of PepsiCo Americas Foods, who will also retain responsibility for the company’s $22 billion snack and food business in the Americas.

 

The Global Snacks Group will focus on developing a coordinated approach to the company’s global brand portfolio, creating and delivering breakthrough snacks innovation and promoting best practice-sharing around the world. This decision to create GSG advances the company’s multi-year strategy to establish global platforms for marketing, branding and innovation. Previously, PepsiCo had announced the creation of the Global Nutrition Group and the Global Beverages Group.

 

PepsiCo chairman and chief executive Indra Nooyi.

The Power of One – Americas Council is intended to ensure full coordination across the food and beverage operating systems, while also unlocking opportunities to create value across the business – from sales, marketing and distribution to back-office operations. The new group will also focus on creating opportunities in complementary food and beverage products in ways that are attractive to retailers and consumers.

 

“The value of this combined portfolio has been greatest in our international markets, which share many activities; and we are now well positioned to realize further benefits inNorth Americafollowing the successful integration of our bottling business,” says PepsiCo chairman and chief executive Indra Nooyi. “Snack and beverage occasions are typically planned together, and the products are both purchased and consumed together. Our new Power of One – Americas Council will help us to better coordinate our manufacturing, sales and distribution activities and align our retail and consumer brand promotions across our portfolio, which will result in greater operating efficiency, speed to market and value.”

 

The profit and loss responsibilities remain with the company’s four business units – PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe and PepsiCo Asia, Middle East and Africa.

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PepsiCo and ‘World’s Greatest Chef’ in New Partnership


Ferran Adria (pictured right), whose restaurant El Bulli in Spain has been named best in the world five times by Restaurant Magazine, will work with PepsiCo to help develop new methods and concepts for creative food innovation. This partnership follows an existing successful relationship between the two parties which began in 2005 and involved Chef Adria’s consultation on PepsiCo Spain’s Alvalle brand of chilled vegetable soups and Lay’s Artesanas 100% olive oil among others.

Ferran Adria will share creative principles, methods, procedures and techniques in order to assist PepsiCo in the creation of new snackable foods, breakfast options and convenience alternatives. He will help to inspire PepsiCo’s product development team by sharing samples, food trends and observations from around the world.

One specific area of focus for the partnership will be exploring the culinary arts to enable PepsiCo to broaden its portfolio of healthier choices. This includes developing taste enhancement ingredients and natural preserving techniques in order to reduce the use of fat and oil in current products, therefore making them healthier.

Indra Nooyi, PepsiCo chairman and chief executive, explains: “PepsiCo has had a long standing reputation for food innovation and this partnership, with arguably the best chef in the world, will enable us to move further forward with new creative concepts and ideas. We will also share our own creative principles and ideas, developed over our 46 year history, in order to help assist Ferran Adria with his mission to create a world leading gastronomic think tank and research facility in the future.”

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PepsiCo Europe Gets Greener


PepsiCo’s Frito-Lay manufacturing facility in Azov, Russia, has been officially awarded LEED Silver by the US Green Building Council (USGBC). The manufacturing facility is the first site in PepsiCo’s European network to receive the prestigious LEED certification for New Construction/Major Renovation, bringing the total number of LEED certified PepsiCo facilities around the world to 27.

LEED certification is an internationally recognised distinction for the design, construction and operation of high performance green buildings. To achieve LEED certification, the Azov facility boasts a number of impressive sustainability results including:

* More than 18% projected energy savings,

* More than 40% projected water savings for installed plumbing fixtures,

* 100% reduction in potable water use for landscape irrigation,

* High performance electric lighting and daylighting for more than 75% of the building spaces,

* Increased ventilation rates and low toxic materials for improved air quality,

* Occupant control of lighting, temperature, and indoor environment.

PepsiCo’s 27 LEED certifications, include its Frito-Lay North America headquarters in Plano, Texas, Chongqing plant and office in China, PepsiCo Plaza and Sustainability Center in Chicago, City of Industry manufacturing facility in California, and Frito-Lay plants in Casa Grande, Arizona and Killingly, Connecticut.

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PepsiCo to Test Reduced-Sugar Cola Innovation – Pepsi NEXT


PepsiCo will begin testing a new reduced-sugar cola, Pepsi NEXT, in the US in July. Pepsi NEXT was created for consumers who seek the rich taste of full-calorie cola but have decreased their consumption in order to reduce the sugar in their diet. While sugar-reduction is a priority for this segment, they have not adopted the flavour profile of a zero calorie cola. With its real cola flavour and 60 percent less sugar, Pepsi NEXT has been designed for these consumers.

“As part of our continued commitment to innovate our carbonated soft-drinks portfolio, we developed Pepsi NEXT,” says Massimo d’Amore, chief executive of PepsiCo Beverages America. “In thorough consumer research, Pepsi NEXT resonated very well with consumers who are seeking a new, reduced sugar alternative to their loved cola.”

Pepsi NEXT will be trialed in two markets in Iowa and Wisconsin.

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PepsiCo Launches European Search for Emerging Communications and Technology Companies


PepsiCo has announced an open call for digital entrepreneurs across Europe to apply to take part in ‘PepsiCo10’, an innovation incubator program designed to discover and support emerging technology companies whose ideas and solutions can be applied to drive business value for the global soft drinks and snacks group.

Launched successfully in the United States last June, PepsiCo has now expanded PepsiCo10 to Europe. The goal of the PepsiCo10 Europe program is to identify up to 10 of the most promising companies and give them the opportunity to work with PepsiCo in the UK to deliver pilots of their technologies, whilst receiving the support and guidance from industry-leading mentors.

PepsiCo is looking to identify businesses with ‘ready-to-go’ technologies across five categories; social media; mobile marketing; place based technology; digital video; and gaming or learning platforms. Highland Capital Partners, OMD and Weber Shandwick will continue to serve as advisors to PepsiCo throughout the program.

Selected applicants will undergo a series of rigorous assessments, and a subset will be invited to participate in a second round and submit video presentations, which will be judged by senior brand representatives from PepsiCo brands Pepsi, Walkers, Tropicana and Quaker. Companies’ ideas and solutions will be evaluated on their potential ability to impact PepsiCo’s business and to deliver on ‘Performance with Purpose’, the company’s commitment to finding innovative ways to minimise its impact on the environment; to provide a great workplace for its associates; and to respect, support and invest in the local communities where it operates.  Prospective applicants can find out more about the program and apply online until July 15, 2011 at www.pepsico10.com.

Near completion, PepsiCo10’s pilot programs in the US have resulted in the execution of successful digital marketing activations across US brands. These winning technologies include: Tongal, a video sharing platform that is currently sourcing animation video for the Brisk Tea brand; BreakOut Band, a collaboration music platform that worked with Pepsi MAX to execute at the 2011 South by Southwest Interactive and Music conference; and Evil Genius Designs, a mobile gaming platform with which PepsiCo has worked to develop a virtual reality video game featuring products across the PepsiCo portfolio.

“There is a huge appetite amongst consumers for new and exciting social media technologies and for us as a business, digital is a dynamic and increasingly important area for innovation,” points out Ian Ellington, general manager for Walkers Crisps, one of the brands which will benefit from the PepsiCo10 technologies. “We’ve already used digital and social media to great success in our past campaigns, such as Walkers’ Do Us A Flavour campaign and we now look forward to harnessing the emerging tech and start-up landscape and cultivating the next generation of digital pioneers.”

CAPTION:

PepsiCo10 winner BreakoutBand brought an interactive music beat maker to the Pepsi MAX Lot at SXSW Interactive 2011, giving music fans a chance to mix their own beats on-site, form virtual bands and create original songs via their mobile phones.

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PepsiCo Invests £8.5 Million in Quaker Mill as Porridge Sales Soar


PepsiCo UK is investing £8.5 million in its Quaker Oats site at Cupar in Fife, Scotland, in order to meet increasing consumer demand for Quaker’s hot cereals, which have grown by 13% over the last year. Quaker Oats will benefit from a new state-of-the-art plant based at the Cupar site, helping to boost its oat milling capacity and allow for increased production.

Porridge has become an ever more popular and all-year round breakfast choice for British consumers. In particular, Quaker’s Oat So Simple range has been driving the company’s growth with sales of the product’s flavour variants growing by 30% year on year. The launch of this range revolutionised the porridge market as it made it easier for people to cook porridge and offered taste variations.

“Quaker Oats have been milled at the Cupar site for over 60 years and as we’re one of just two manufacturers that still mill our own oats, it’s really important for us to continue to invest in the site, so that we can protect this great heritage,” says David Murray, general manager of Quaker Oats. “We’ve been expanding the site for many years, having added 8 production lines since 2002, but this new investment will really help us to continue to feed the incredible consumer demand for porridge as a breakfast choice.”

Quaker Oats have been produced on the Cupar site since 1947. The site is currently home to Quaker Oats and Scott’s Porage Oats; producing Oat So Simple, as well as Quaker’s latest innovation, Quaker Oat So Simple Pots, designed to make porridge preparations even easier.

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39 Consecutive Years of Dividend Increases by PepsiCo


Global soft drinks and snacks giant PepsiCo has declared its thirty-ninth consecutive annual dividend increase, by lifting the current annual rate from $1.92 to $2.06 per share on the group’s common stock.

“PepsiCo has a long and consistent track record of delivering strong operating results and achieving top-tier financial performance,” points out Indra Nooyi, chairman and chief executive of PepsiCo. “The board’s decision to once again raise the annual dividend reflects our confidence in both the near- and long-term growth of our business as well as our ongoing commitment to delivering strong cash returns to shareholders. Since the beginning of 2001, we have returned over $48 billion to shareholders in the form of dividends and share repurchases.”

Incorporating Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi Cola, PepsiCo offers the world’s largest portfolio of billion dollar food and beverage brands, including 19 different product lines that generate more than $1b in annual retail sales each.

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Stevia Sweetens Health Trends


Stevia has enjoyed a meteoric rise in popularity on the global stage over the past four years. A new study by leading food and drink consultancy Zenith International estimates that worldwide sales of stevia reached 3,500 tonnes in 2010, a 27% increase on 2009, taking its overall market value to $285m.

“As rising levels of obesity and diabetes continue to dominate headlines, there has never been so much emphasis on reducing our caloric intake as well as consuming healthier foods and beverages,” comments Zenith senior market analyst Anya Hembrough. “After persistent efforts by key producers, legislators worldwide are finally giving the green light to this new zero-calorie sweetener.”

Originating from Paraguay, where stevia leaf has been valued for centuries because of its sweetening properties, stevia has been used as a sweetener in Japan and parts of South America for decades. The high intensity sweetener offers a sweetening power some three hundred times that of table sugar, without adding any calories. Widely used as a table top sweetener, stevia is increasingly being recognised as an ingredient in finished products – in particular soft drinks – thanks to its versatility. However, it is the ingredient’s all-natural credentials which make it stand out from the crowd.

The turning point in stevia’s fortunes came in 2008 when steviol glycosides, the sweetening components of the leaf, were deemed to be safe and Rebaudioside A, one particular steviol glycoside, was granted GRAS (Generally Recognised as Safe) status in the US. Since then, approval by legislators across the world has opened the door to new formulations and reformulations of foods and beverages with zero or reduced calorie content. Its status as a global ingredient was secured with its incorporation into leading soft drinks brands manufactured by Coca-Cola and PepsiCo.

If the rise in stevia has been impressive to date, the future looks even more promising, with approval still pending in a number of regions, and European authorisation widely anticipated for later in 2011. Zenith forecasts that the global market for stevia will reach 11,000 tonnes by 2014, equivalent to $825m by value.

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PepsiCo and Strauss Group to Establish Joint Venture


PepsiCo and Strauss Group, Israel’s second-largest food and beverage company, are to form a joint venture partnership that will produce and sell fresh dips and spreads in key markets outside of North America. The two companies have operated a successful North American joint venture since 2007 under the Sabra brand. In North America, Sabra is the number one brand of hummus and the leader in the chilled dips and spreads category.

PepsiCo and Strauss will leverage their existing infrastructures and invest in manufacturing plants, technologies and employees to set up local operations on a country or regional level. Each partner will own 50% of the new joint venture business. Financial terms were not disclosed.

With nearly 50% category share in North America, Sabra’s products include hummus, fresh salsa and egg plant dips. Sabra’s 2010 revenues totaled $159m, up nearly 45% from the prior year.

The new joint venture follows recent efforts by both PepsiCo and Strauss to promote health and wellness throughout their product portfolios. In October 2010, PepsiCo formed its Global Nutrition Group to accelerate product development in the areas of fruits and vegetables, whole grains, dairy and functional nutrition. PepsiCo has set a goal of tripling its annual revenues from nutritious and functional foods from approximately $10b in 2010 to $30b by 2020.

Strauss Group operates 19 production sites in 20 countries. In the last seven years the group has consistently achieved growth, generating around $1.83b in turnover at the end of 2010, of which 46% came from international activities. Strauss Group comprises of four core business units: Strauss Israel, Strauss Coffee, Strauss North America and Strauss Water. The group is a leading player in coffee markets in Central and Eastern Europe, Brazil and Israel for Roast & Ground (R&G) coffee and other coffee related products and services.

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PepsiCo Develops World’s First 100% Plant-Based, Sustainable PET Bottle


PepsiCo has developed the world’s first PET plastic bottle made entirely from plant-based, fully renewable resources, enabling the company to manufacture a beverage container with a significantly reduced carbon footprint. According to PepsiCo, its ‘green’ bottle is 100% recyclable and far surpasses existing industry technologies.

The bottle is made from bio-based raw materials, including switch grass, pine bark and corn husks. In the future, the company expects to broaden the renewable sources used to create the ‘green’ bottle to include orange peels, potato peels, oat hulls and other agricultural by-products from its foods business. This process further reinforces PepsiCo’s ‘Power of One’ advantage by driving a strategic beverage innovation via a food-based solution.

“This breakthrough innovation is a transformational development for PepsiCo and the beverage industry, and a direct result of our commitment to research and development,” says Indra Nooyi, chairman and chief executive of PepsiCo. “PepsiCo is in a unique position, as one of the world’s largest food and beverage businesses, to ultimately source agricultural by-products from our foods business to manufacture a more environmentally-preferable bottle for our beverages business – a sustainable business model that we believe brings to life the essence of Performance with Purpose.”

PepsiCo will pilot production of the new bottle in 2012. Upon successful completion of the pilot, the company intends to move directly to full-scale commercialisation.

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Leadership Change at Wimm-Bill-Dann Foods


Tony Maher, chief executive of Wimm-Bill-Dann Foods, will leave the Russian dairy and food group on May 1st 2011. His decision to step down as chief executive follows the successful conclusion of the landmark sale of Wimm-Bill-Dann Foods to PepsiCo. An announcement on Tony Maher’s successor will be made in the coming weeks.

“The last five years as chief executive of Wimm-Bill-Dann have been some of the most exciting and satisfying of my career. I am pleased that I have accomplished almost everything I set out to do when I joined the company,” Tony Maher comments.

Tony Maher.

He continues: “I was lucky to have had a rare professional opportunity to shape the future of one of Russia’s most advanced companies and have a strong influence on the overall development of the Russian consumer market. My focus has always been to develop the company, its people and its products for the long-term. I have had the privilege of working with a fantastic team of people on every level of the company. Now I really believe Wimm-Bill-Dann and its remarkable people have a great future ahead as part of a more global organisation.”

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Surge in Sales at PepsiCo


Driven by gains across its worldwide snacks and beverage businesses, and from the acquisitions of its anchor bottlers earlier in the year, PepsiCo has reported a 34% surge in net revenue to $57.84b for 2010 with net income up 6% to $6.34b and ahead by 15% on a constant currency basis.

The successful integration of its two anchor bottlers to create more-efficient and effective beverage businesses in its key North American market and in Europe, allowed PepsiCo to deliver more than $150m in synergies from the acquisitions in 2010, above target for the year. The strong pace of synergy realisation and the identification of additional synergies have led PepsiCo to increase expectations for total synergies through 2012 to more than $550m.

During the year, the US-based soft drinks and snacks group acquired Wimm-Bill-Dann, Russia’s preeminent food and beverage company, to significantly strengthen its competitive position in Russia and Eastern Europe, while also providing a strong foothold in the attractive dairy category.

Indra Nooyi, chairman and chief executive of PepsiCo.

“The underlying performance of our businesses remained solid despite a challenging macroeconomic environment,” says Indra Nooyi, chairman and chief executive of PepsiCo. “We posted broad-based worldwide gains in both snacks and beverages, our businesses deftly balanced a delicate price-value consumer equation, and we aggressively managed costs and productivity to deliver top-tier financial results.”

She continues: “Importantly, we are entering 2011 an even-stronger, more-capable organisation. Our core global snacks and beverage businesses benefit from strong brands, world class go-to-market systems, and innovative and differentiated products and we strengthened these advantages in 2010 through targeted investments.”

While encouraged by the momentum of the businesses entering 2011, she is mindful of a weak consumer landscape given the poor macroeconomic picture, especially in key developed markets, the high levels of cost inflation for the coming year, driven by broad and pronounced commodity inflation, and a potentially difficult competitive pricing environment, particularly in beverages.

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PepsiCo Gains Russian Approval For Wimm-Bill-Dann Acquisition


PepsiCo has received Russian regulatory clearance for its acquisition of 66% of Wimm-Bill-Dann Foods, Russia’s leading branded food and beverage company, for $3.8b. The US-based soft drinks and snack foods giant now plans to close the acquisition on or about February 8th, 2011. After closing the acquisition agreement, PepsiCo will own approximately 77% of the total outstanding ordinary shares of Wimm-Bill-Dann.

The transaction will make PepsiCo the largest food and beverage business in Russia and will strengthen the group’s position in the fast-growing Eastern European and Central Asian markets. It also will raise PepsiCo’s annual global revenues from nutritious and functional foods from approximately $10b today to nearly $13b. This moves PepsiCo closer to its strategic goal of building a $30b nutrition business by 2020.

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PepsiCo to Acquire 66% of Wimm-Bill-Dann For $3.8 Billion


PepsiCo is acquiring a 66% stake in Wimm-Bill-Dann Foods, Russia’s leading branded food and beverages company, for $3.8b, pending the required government approvals. Wimm-Bill-Dann is a leader in both traditional and value-added dairy products, with a solid position in juice.

The transaction will establish PepsiCo as the largest food-and-beverage business in Russia, make it a leader in the country’s fast-growing dairy category and build its presence in key markets in Eastern Europe and Central Asia. It will also raise PepsiCo’s annual global revenues from nutritious and functional foods from approximately $10b today to nearly $13b. This moves the US-based beverages and snacks group closer to its strategic goal of building a $30b nutrition business by 2020.

“Adding Wimm-Bill-Dann to PepsiCo’s portfolio is financially attractive and gives us a strong, high-growth platform in the dairy category,” says Indra Nooyi, chairman and chief executive of PepsiCo. “It also gives us clear leadership in the food and beverage industry in Russia, a fast-growing, strategically important market offering abundant opportunity. At the same time, Wimm-Bill-Dann’s strong, value-added dairy business immediately advances our global nutrition strategy to provide consumers around the world nutritious foods and beverages that are accessible, affordable and advantaged by science. Dairy has a huge, untapped potential to bridge snacks and beverages. We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience.”

Wimm-Bill-Dann was founded just 18 years ago with a handful of employees. Today the group employs over 16,000 people and operates 38 production facilities.

The integration of Wimm Bill Dann is expected to yield pre-tax annual synergies of approximately $100m by 2014. The completed transaction will bring together PepsiCo’s large global food and beverage brands (Pepsi-Cola, Lipton and Lay’s), its Russian juice and water brands (Fruktovi Sad, Ya, Tonus, Hrusteam and Aqua Minerale) and Wimm-Bill-Dann’s portfolio of leading dairy and juice brands (Domik v Dorevne, Chudo, Imunele, J7, Lubimy Sad, 100% Gold Premium and Agusha).

Upon completion of the full Wimm-Bill-Dann acquisition, PepsiCo’s brands will rank first among food and beverage companies operating in Russia, with approximately $5b in revenue. PepsiCo will have six of the twenty largest food and beverage brands in Russia.

PepsiCo will be approximately twice the size of its nearest food and beverage competitor in Russia, with an unmatched distribution platform for its products. PepsiCo will employ approximately 31,000 people in Russia, Ukraine and Central Asia and have 49 manufacturing facilities, making the company one of the largest food and beverage employers in the region.

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United Biscuits Sale Talks End


The exclusive talks to acquire United Biscuits, the British and international biscuits and snacks manufacturer, between its owners and Chinese food conglomerate Bright Food Group are reported to have ended with no formal offer forthcoming. The co-owners of United Biscuits, private equity firms Blackstone Group and PAI Partners, have now opened talks with other potential bidders as they seek to auction off the business. Blackstone Group and PAI Partners acquired United Biscuits for £1.6b four years ago but put is up for sale earlier this year.

United Biscuits is one of the world’s leading branded biscuits and snacks businesses. The group’s products range from biscuits and crackers to cakes and savoury snacks and its portfolio of brands includes McVitie’s, Jacob’s, Carr’s, McCoy’s, Hula Hoops, McVitie’s Jaffa Cakes, KP, Mini Cheddars, go ahead!, Verkade, Sultana, BN, and Delacre. In 2009, United Biscuits increased EBITDA by 13.7% to £223.4m on turnover up 5% to £1.26b.

The group has £1.2b of debt and the asking price is believed to be in the region of £2b. Potential suitors for United Biscuits include Campbell Soup, Krafts Foods, PepsiCo and Kellogg.

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PepsiCo Continues to Invest Heavily in Emerging Markets


Having recently unveiled plans to invest $140m to build its tenth plant in Russia as part of a $1b investment programme in the country, PepsiCo has announced that it will construct a $73m beverage facility in Vietnam. The move marks the first phase of a $250m investment programme in Vietnam. The new plant in the northern Bac Ninh province will become the global soft drinks and snacks giant’s biggest production site in Vietnam.

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PepsiCo Plans to Revolutionise its Farming with New i-crop Technology


PepsiCo plans to roll-out globally its new i-crop farming technology that will enable the soft drinks and snacks group’s farmers around the world to monitor, manage and reduce their water use and carbon emissions, while also maximizing potential yield and quality. The web-based crop management system was developed by PepsiCo in conjunction with Cambridge University in the UK.

Trials of i-crop are currently underway at 22 farms in the UK, where PepsiCo has ambitious plans to reduce carbon emissions and water usage by 50% across the farming of its core crops in the next five years.

The technology will be rolled-out throughout Europe during 2011, with planned introductions in Holland, France, Germany, Belgium, Spain, Portugal and Turkey. The company hopes to take it to India, China, Mexico and Australia by 2012.

As one of the world’s largest food and beverage businesses, with brands including Quaker, Tropicana, Gatorade, Pepsi-Cola and Frito-Lay, PepsiCo is a major investor in global farming. In 2010, the company announced 15 global goals and commitments to guide its work to protect the Earth’s natural resources through innovation and more efficient use of land, energy, water and packaging.

In the UK, the company is the largest purchaser of British potatoes and one of the largest purchasers of British oats and apples, using 100% British produce in Walkers crisps, Copella English Apple juice, Quaker Oats, Oatso Simple and Scott’s porridge.

“Farming is in the DNA of our business – we rely on fresh produce every day. Finding ways to produce more food with less environmental impact is essential to our future,” explains Richard Evans, president of PepsiCo UK and Ireland. “I-crop has the potential to revolutionise the way we farm, enabling our farmers to save costs and water and carbon consumption, while at the same time improving their yields.”

In its first ‘Sustainable Farming Report’, PepsiCo UK outlined how it is working in partnership with its 350 British farmers to reach its aim of ‘50 in 5’. Other initiatives announced include trials of new low-carbon fertilizers and plans to replace more than 75% of PepsiCo UK’s current potato stock with varieties that will significantly improve farmers’ yields and decrease wastage by 2015.

Commenting on the PepsiCo UK sustainable farming report, Richard Perkins, senior commodities adviser at WWF says: “The food industry is starting to recognize that in order to fully embed sustainability and biodiversity in its business practices, a large part of the focus must be on the agricultural supply chain. In this respect PepsiCo UK has taken a leadership role in recognising that it is, at its heart, an agricultural business. The focus of the business on improving its key environmental impacts, such as greenhouse gas emissions – in the field and on the farm – is most welcome.”

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PepsiCo Plans to Invest $140 Million in New Beverage Plant in Russia


Global soft drinks and snacks giant PepsiCo plans to invest $140m to build its tenth plant in Russia. The new plant will be constructed in the city of Azov, where the company recently completed a snacks plant.

Indra Nooyi, chairman and chief executive of PepsiCo.

Both plants in Azov are part of PepsiCo’s $1b investment programme in Russia, announced in 2009. In the previous ten years, PepsiCo invested $3b in Russia. Placing both plants on the same property will allow for more efficient logistics and leverage the advantages of production processes and technologies that save water and energy.

“Russia is one of our most exciting growth opportunities, and our $250m total investment in two plants in the Rostov region reflects our commitment to this key market,” says Indra Nooyi, chairman and chief executive of PepsiCo. “Our goal is to build a premier food and beverages company in Russia, and we are actively investing in manufacturing and logistics infrastructure to achieve that. Consistent with our ’Performance with Purpose’ vision, we also are broadening our portfolio by adding healthier products, implementing new environmental initiatives and taking steps to support the growth and development of our employees.”

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Estrella Maarud Joins Savoury Snacks Industry Pledge


Estrella Maarud, a leading, Norwegian-owned manufacturer of savoury snacks for the Nordic and Baltic markets, has decided to join the advertising pledge recently launched by the European Snacks Association (ESA). In April, ESA announced its support for the EU Pledge, whereby member companies are committed to changing food and beverage advertising on TV, print and internet to children under the age of 12 in the European Union.

The EU Pledge programme is a voluntary commitment to the EU Platform for Action on Diet, Physical Activity and Health, the multi-stakeholder forum set up by the European Commission in 2005 to encourage interested parties to take initiatives aimed at fighting obesity in Europe.

In April, the following ESA member companies signed the ESA Pledge agreement which enters into force on 1st January 2011: Intersnack, Lorenz Snack-World, Procter & Gamble, Unichips and Zweifel Pomy-Chip. Two ESA member companies, LU Snack Foods (Kraft) and PepsiCo, are already members of the EU Pledge Group. These companies represent the bulk of advertising expenditure in the European savoury snacks market.

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Campbell Considering Bid For United Biscuits


US-based Campbell, the world’s largest soup company, is reported to be preparing a £1.5b break-up bid for United Biscuits, the British and international biscuits and snacks manufacturer. Campbell’s interest is in the biscuits part of United Biscuits, which includes the McVitie’s, Penguin, Jaffa Cakes and HobNobs brands. United Biscuits is also a major snacks manufacturer with a brands portfolio that incorporates McCoy’s crisps, Hula Hoops, KP Nuts and Twiglets.

In 2009, United Biscuits increased EBITDA by 13.7% to £223.4m on turnover up 5% to £1.26b. Current owners, private equity firms Blackstone Group and PAI Partners, which acquired United Biscuits for £1.6b four years ago, have put the company up for auction.

Three other US-based food groups – Krafts Foods, PepsiCo and Kellogg – are also believed to be potential bidders for United Biscuits.

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PepsiCo and Senomyx Enter Into Collaboration to Discover, Develop and Commercialize New Sweet Flavor Ingredients


PepsiCo, the world’s second-largest food and beverage business, and Senomyx, Inc., a leading company focused on using proprietary technologies to discover and develop novel flavor ingredients for the food, beverage, and ingredient supply industries, announced today that they have entered into a four-year collaborative agreement related to Senomyx’s sweet-taste technology.

PepsiCo’s collaboration with Senomyx will focus on the discovery, development and commercialization of sweet enhancers and natural high-potency sweeteners with the intent to bring to the marketplace lower-calorie, great tasting PepsiCo beverages.  The agreement reflects the companies’ shared commitment to offer healthier products to consumers that maintain the sweet taste they want.  

“This relationship with Senomyx reflects our increasingly long-term approach to research and development as well as our belief that global food and beverage companies can play an important role in identifying new ingredients that can lead to healthier products,” said Mehmood Khan, PepsiCo’s chief scientific officer.  “The real challenge is to create products that not only are healthier but also taste great, and Senomyx has unique technologies that will allow us to improve the nutritional profile of our products without sacrificing taste.  We’re very optimistic that this collaboration will help us achieve our commitment to reduce added sugar per serving by 25% in key brands in key markets over the next decade and ultimately help people around the world live healthier lives.”

“We are looking forward to working with PepsiCo on our common objective of developing products that meet the growing demand for lower-calorie offerings,” stated Kent Snyder, chief executive officer of Senomyx.  “PepsiCo is an industry leader with its commitment to reducing added sugar in key global beverage brands, and we are particularly excited about expanding our research efforts for the discovery of enhancers of sweeteners such as sucrose and fructose and the identification of new natural high-potency sweeteners that would allow Senomyx to provide PepsiCo with a broad spectrum of sweet- taste options.”

PepsiCo will have exclusive rights to the Senomyx sweet flavor ingredients developed under the collaboration for use in non-alcoholic beverage categories.  Under the agreement, Senomyx will receive an upfront payment of $30 million from PepsiCo, $7.5 million of which was paid previously.  Senomyx also will be entitled to $32 million in committed research and development payments over the four-year research period.  PepsiCo retains the option to extend the research collaboration for two more years, which would result in additional research funding commitments.  Senomyx also will be eligible for milestone payments based on the achievement of predetermined goals as well as royalty payments.

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