Pepsi 2008 Annual Report Download - page 8

We are investing aggressively to keep our total
beverage portfolio relevant to consumers of all
ages. In non-carbonated beverages, we are working
to deliver the right value for the money, to identify
untapped thirst occasions and to deliver even more
health benets. We added vitamins to our Gatorade
sublines; and this year we will introduce a new
Trop50 orange juice beverage, with half the calories
of orange juice, great nutritional benets and the
natural sweetness of PureVia.
We have a great portfolio that gives us all con-
dence. And we have reexamined how that portfolio
connects with today’s world. We have brought two
things together—the fun and bubbles of our car-
bonated beverages that people really love, and the
symbols and experiences of today’s online world.
Our re-branding strategy sets an irresistible tone
of joy, optimism and energy. Those are three words
that I always want to be associated with PepsiCo.
PepsiCo International’s balanced and diverse
snack and beverage portfolio had a good year. It
delivered strong growth from treats to healthy eats.
This thriving business spans Europe, the Middle East,
Asia, Africa and Australia, serving 86 percent of the
world’s population. With per-capita consumption
still relatively low in many of these markets, we
have a strong opportunity to drive sales ahead of
GDP growth.
This year we broadened our beverage portfolio by
partnering with The Pepsi Bottling Group to acquire
Russia’s leading juice company, Lebedyansky, by
acquiring V Water in the United Kingdom and by
expanding our successful Lipton Tea partnership with
Unilever. In the snack business, we acquired Bulgaria’s
leading nuts and seeds producer, and we introduced
a variety of local avors, including Lay’s Shashlyk in
Russia and Lay’s Cool Blueberry in China. In India,
we introduced Kurkure Naughty Tomato and Lay’s
Balsamic Blast and Spunky Pimento avors; and our
Doritos brand helped drive volume in the Middle East
and South Africa. Together, these initiatives helped
PepsiCo International revenues grow by 19 percent
and core operating prot by 16 percent.*
To sustain our worldwide growth, we announced
signicant investments in key countries like Brazil,
India, Mexico and China. In India and Brazil, we are
combining capacity expansion and research and
development (R&D) with sustainability efforts as we
grow in those regions. Building on a brand history
of more than 100 years in Mexico, we are invest-
ing over the next ve years in R&D, manufacturing
and distribution, marketing and advertising. And in
China—one of our fastest-growing markets—we are
funding capacity expansion, R&D, increased distribu-
tion, brand building, agricultural sustainability and
resource conservation.
All over the company, we have Performance with
Purpose as our mission. And the way we achieve it,
all over the world, is always to encourage new ways
of working. Innovation is our lifeblood—it drives
success in all our businesses.
That is why we implemented a Productivity for
Growth initiative across all sections of our business.
Over the next three years, our productivity measures
are expected to cumulatively free up more than
$1.2 billion. That money will allow us to step up invest-
ments in long-term product development, innovation
and brand building. Our productivity savings will
also enhance our operating agility and create some
breathing room to respond to the changing economic
environment. And, as long as that innovation is driven
through the company, we will deliver the demands of
Performance with Purpose.
2008 was a year in which our mission could easily
have been abandoned. The extraordinary circum-
stances would have resulted in it being abandoned
if it were not already embedded into our culture. So,
during 2008 we stayed true to our beliefs, even as
the backdrop got tougher.
For example, we never took our eyes off the
sustainability agenda that underpins our commercial
success. We have now driven sustainability all the
way through the business. It is a part of what we do,
not an addition to what we do.
To promote human sustainability, we worked
within World Health Organization policies to teach
*Forareconciliationtothemostdirectlycomparablenancialmeasureinaccordance
with GAAP, see page 95.
6PepsiCo, Inc. 2008 Annual Report