Pepsico Company Analysis

PepsiCo

Historically, PepsiCo's beginning dates back to the turn of the century when a pharmacist Caleb Bradham, began serving a soda fountain drink of his own creation in his drugstore. His most popular beverage was something he had named "Brad's Drink" made of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. This drink was later named Pepsi Cola in 1898. The name "Pep Cola" was trademarked on June 16th, 1903. Then after many successful years, Pepsi Cola went bankrupt in 1923 resulting from Bradham's belief that sugar prices would continue rising after the war. In 1931, Pepsi Cola was bought by Charles G. Guth, president of the Loft Candy Company. Following a reformulation of the popular drink, Guth struggled to make it a success and even offered to sell Pepsi to Coca-Cola Company, who refused to make an offer (Anonymous, 2007).

Pepsi gained in popularity during the Great Depression, when it introduced a 12-ounce bottle. After initially slow sales, prices of 10 cents were slashed to five cents, drawing in more consumers. Also, a radio advertising campaign was started featuring a jingle, "Pepsi-Cola hits the spot; Twelve full ounces, that's a lot; Twice as much for a nickel, too; Pepsi-Cola is the drink for you," Pepsi then encouraged consumers to switch, from Coca-Cola selling a standard six ounces per bottle for the price of five cents, instead of the 12 ounces Pepsi sold at the same price. It was Pepsi's brilliant move at a time of economic crisis, that boosted Pepsi's status to what is has become today. (Anonymous, 2007).

Located in the U.S. PepsiCo is one of the largest companies engaged in the food, beverage and snack industries. The company, through its subsidiaries, markets, sells and distributes various snack foods internationally. It manufactures concentrates of Pepsi, Mountain Dew and other brands for sale to franchised bottlers in the U.S. and international markets and produces, markets, sells and distributes juices under several Tropicana trademarks in the U.S. as well as internationally. PepsiCo's domestic snack food business is conducted by Frito-Lay North America, and its international snack food business is conducted by Frito-Lay International. The company's soda business operates as the Pepsi-Cola Company and is comprised of two business units: Pepsi-Cola North America and Pepsi-Cola International. In December 2000, the Company announced an agreement under which a subsidiary of PepsiCo would merge with The Quaker Oats Company, and Quaker became a wholly owned subsidiary of PepsiCo. Quaker Oats Company is a worldwide marketer of foods and beverages. It manufactures and markets Gatorade, along with hot cereals, pancake syrups, grain based snacks, cornmeal, hominy grits and value-added rice products. PepsiCo also operates several food franchises including Pizza Hut, KFC, and Taco Bell (Banks,