Pepsi 2007 Annual Report Download - page 34

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We are a leading global snack and bever-
age company. We manufacture, market
and sell a variety of salty, convenient,
sweet and grain-based snacks, carbonated
and non-carbonated beverages and foods.
Our commitment to sustainable growth,
defi ned as Performance with Purpose, is
focused on generating healthy fi nancial
returns while giving back to the com-
munities we serve. This includes meet-
ing consumer needs for a spectrum of
convenient foods and beverages, reducing
our impact on the environment through
water, energy and packaging initiatives,
and supporting our employees through
a diverse and inclusive culture that
recruits and retains world-class talent. In
September 2007, we were again included
on the Dow Jones Sustainability North
America Index and were also added to
the Dow Jones Sustainability World Index.
These lists are compiled annually.
We are organized into four divisions:
Frito-Lay North America,
•
PepsiCo Beverages North America,•
PepsiCo International, and •
Quaker Foods North America. •
Our North American divisions operate
in the U.S. and Canada. Our international
division sells products in approximately
200 countries, with our largest opera-
tions in Mexico and the United Kingdom.
Additional information concerning our
divisions and geographic areas is pre-
sented in Note 1.
Frito-Lay North America
Frito-Lay North America (FLNA) manu-
factures or uses contract manufacturers,
markets, sells and distributes branded
snacks. These snacks include Lay’s potato
chips, Doritos tortilla chips, Tostitos tortilla
chips, Cheetos cheese fl avored snacks,
branded dips, Fritos corn chips, Ruffl es
potato chips, Quaker Chewy granola bars,
SunChips multigrain snacks, Rold Gold
pretzels, Santitas tortilla chips, Grandma’s
cookies, Frito-Lay nuts, Munchies snack
mix, Gamesa cookies, Funyuns onion fl a-
vored rings, Quaker Quakes corn and rice
snacks, Miss Vickie’s potato chips, Stacy’s
pita chips, Smartfood popcorn, Chester’s
fries, branded crackers and Flat Earth
crisps. FLNA branded products are sold to
independent distributors and retailers.
PepsiCo Beverages North America
PepsiCo Beverages North America (PBNA)
manufactures or uses contract manu-
facturers, markets and sells beverage
concentrates, fountain syrups and fi nished
goods, under various beverage brands
including Pepsi, Mountain Dew, Gatorade,
Tropicana Pure Premium, Sierra Mist,
Propel, Tropicana juice drinks, Dole, SoBe
Life Water, Naked juice and Izze. PBNA
also manufactures or uses contract manu-
facturers, markets and sells ready-to-drink
tea, coffee and water products through
joint ventures with Unilever (under the
Lipton brand name) and Starbucks. In
addition, PBNA licenses the Aquafi na
water brand to its bottlers and markets
this brand. PBNA sells concentrate and
fi nished goods for some of these brands
to authorized bottlers, and some of these
branded products are sold directly by us
to independent distributors and retailers.
The bottlers sell our brands as fi nished
goods to independent distributors and
retailers. PBNA’s volume refl ects sales to its
independent distributors and retailers, as
well as the sales of beverages bearing our
trademarks that bottlers have reported
as sold to independent distributors and
retailers. Bottler case sales (BCS) and
concentrate shipments and equivalents
(CSE) are not necessarily equal during any
given period due to seasonality, timing
of product launches, product mix, bottler
inventory practices and other factors.
While our revenues are not based on
BCS volume, we believe that BCS is a
valuable measure as it measures the
sell-through of our products at the con-
sumer level.
PepsiCo International
PepsiCo International (PI) manufactures
through consolidated businesses as well
as through noncontrolled affi liates, a
number of leading salty and sweet snack
brands including Gamesa, Lay’s, Doritos,
Walkers, Cheetos, Ruffl es and Sabritas.
Further, PI manufactures or uses contract
manufacturers, markets and sells many
OUR BUSINESS OUR BUSINESS
Our discussion and analysis is an integral part of understanding our financial results. Definitions
of key terms can be found in the glossary on page 86. Tabular dollars are presented in millions,
except per share amounts. All per share amounts reflect common per share amounts, assume
dilution unless noted, and are based on unrounded amounts. Percentage changes are based on
unrounded amounts.
Our commitment to sustainable
growth, defined as Performance
with Purpose, is focused on
generating healthy financial
returns while giving back to the
communities we serve.
Our Operations
32