Pepsi 2011 Annual Report Download - page 27

Our Operations
We are organized into four business units, as follows:
1) PepsiCo Americas Foods (PAF), which includes Frito- Lay North
America (FLNA), Quaker Foods North America (QFNA) and all of
our Latin American food and snack businesses (LAF);
2) PepsiCo Americas Beverages (PAB), which includes all of our
NorthAmerican and Latin American beverage businesses;
3) PepsiCo Europe, which includes all beverage, food and snack
businesses in Europe; and
4) PepsiCo Asia, Middle East and Africa (AMEA), which includes all
beverage, food and snack businesses in AMEA.
Our four business units are comprised of six reportable segments
(referred to as divisions), as follows:
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Frito- Lay North America
Either independently or through contract manufacturers, FLNA
makes, markets, sells and distributes branded snack foods. These
foods include Lay’s potato chips, Doritos tortilla chips, Cheetos
cheese avored snacks, Tostitos tortilla chips, branded dips, Rues
potato chips, Fritos corn chips, SunChips multigrain snacks and
Santitas tortilla chips. FLNA branded products are sold to indepen-
dent distributors and retailers. In addition, FLNA’s joint venture with
Strauss Group makes, markets, sells and distributes Sabra refriger-
ated dips and spreads.
Quaker Foods North America
Either independently or through contract manufacturers, QFNA
makes, markets, sells and distributes cereals, rice, pasta and other
branded products. QFNA’s products include Quaker oatmeal, Aunt
Jemima mixes and syrups, Quaker Chewy granola bars, Quaker grits,
Cap’n Crunch cereal, Life cereal, Rice- A-Roni side dishes, Quaker rice
cakes, Pasta Roni and Near East side dishes. These branded products
are sold to independent distributors and retailers.
Latin America Foods
Either independently or through contract manufacturers, LAF
makes, markets, sells and distributes a number of snack food brands
including Marias Gamesa, Doritos, Cheetos, Rues, Saladitas,
Emperador, Tostitos and Sabritas, as well as many Quaker- brand
cereals and snacks. These branded products are sold to indepen-
dent distributors and retailers.
PepsiCo Americas Beverages
Either independently or through contract manufacturers, PAB
makes, markets, sells and distributes beverage concentrates, foun-
tain syrups and nished goods, under various beverage brands
including Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquana, 7UP
(outside the U.S.), Diet Mountain Dew, Tropicana Pure Premium,
Sierra Mist and Mirinda. PAB also, either independently or through
contract manufacturers, makes, markets and sells ready- to-drink
tea, coee and water products through joint ventures with Unilever
(under the Lipton brand name) and Starbucks. In addition, PAB
licenses the Aquana water brand to its independent bottlers.
Furthermore, PAB manufactures and distributes certain brands
licensed from Dr Pepper Snapple Group, Inc. (DPSG), including
DrPepper and Crush. PAB operates its own bottling plants and
distribution facilities. PAB also sells concentrate and nished goods
for our brands to authorized bottlers, and some of these branded
nished goods are sold directly by us to independent distributors
and retailers. We and the independent bottlers sell our brands as
nished goods to independent distributors and retailers.
PAB’s volume re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. However, the dierence
between BCS and CSE measures has been greatly reduced since
ouracquisitions of our anchor bottlers, The Pepsi Bottling Group,
Inc. (PBG) and PepsiAmericas, Inc. (PAS), on February26, 2010, as
wenow consolidate these bottlers and thus eliminate the impact
ofdierences between BCS and CSE for a substantial majorityof
PAB’s total volume. While our revenues are not entirely based
on BCS volume, as there continue to be independent bottlers in
the supply chain, we believe that BCS is a valuable measure as it
quanties the sell-through of our products at the consumer level.
See Note 15 for additional information about our acquisitions of
PBG and PAS in 2010.
Management’s Discussion and Analysis
PepsiCo, Inc.  Annual Report
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