Pepsi 2009 Annual Report Download - page 46

34 PepsiCo, Inc. 2009 Annual Report
Management’s Discussion and Analysis
3. Unleash the Power of “Power of One”
Retail consolidation continues to increase the importance of our
key customers. We must maintain mutually beneficial relationships
with our key customers, as well as retailers and our bottling partners,
to effectively compete. We are in the unique position to leverage
two extraordinary consumer categories that have special relevance
to retailers across the globe. Our snacks and beverages are both high
velocity categories; both generate retail traffic; both are profitable;
and both deliver strong cash flow. The combination of snacks and
beverages—with our “must have” global and local brands—makes
us an essential partner for large-format as well as small-format
retailers. We expect to increasingly use this portfolio and the high
coincidence of consumption of these products through integrated
offerings (products, marketing and merchandising) to create value
for consumers and deliver greater top-line growth for retailers.
We intend to accelerate Power of One supply chain and back-office
synergies in many regions to improve profitability and enhance
customer service.
4. Rapidly Expand our “Good for You” Portfolio
Consumer tastes and preferences are constantly changing and
our success depends on our ability to respond to consumer trends,
including responding to consumers’ desire for healthier choices.
We currently have a roughly $10 billion core of “good-for-you”
products anchored by: Tropicana, Naked Juice, Lebedyansky, Sandora
and our other juice brands; Aquafina; Quaker Oats; Gatorade (for
athletes); the new dairy joint venture with Almarai; and local good-for-
you products and brands. We intend to build on this core with an
increasing stream of science-based innovation derived from the
research and development capabilities that we have been ramping
up over the past couple of years, as well as from targeted acquisi-
tions and joint ventures. We will be investing to accelerate the
growth of these platforms, and we will use the knowledge from
these initiatives to improve our core snack and beverage offerings
and also to develop highly nutritious products for undernourished
people across the world.
5. Continue to Deliver on Our Environmental Sustainability
Goals and Commitments
Consumers and government officials are increasingly focused on the
impact companies have on the environment. We are committed
to protecting the earth’s natural resources and are well on our way
to meeting our public goals for meaningful reductions in water,
electricity and fuel usage. Our businesses around the world are
implementing innovative approaches to be significantly more
efficient in the use of land, energy, water, and packaging—and we
are actively working with the communities in which we operate
to be responsive to their resource needs. In 2009, we formalized our
commitment to water as a human right, and we will focus not only
on world-class efficiency in our operations, but also in preserving
water resources and enabling access to safe water. Our climate
change focus is on reducing our carbon footprint, including the
reduction in absolute greenhouse gas emissions and continued
improvement in energy use efficiency. We actively work with our
farmers to promote sustainable agriculture—and we are develop-
ing new packaging alternatives in both snacks and beverages to
reduce our impact on the environment.
6. Cherish our Employees and Develop the Leadership
to Sustain Our Growth
Our continued growth requires us to hire, retain and develop
our leadership bench and a highly skilled and diverse workforce.
This will be especially important during 2010 in connection with
the integration efforts related to the proposed mergers with PBG
and PAS. We have an extraordinary talent base across our global
organization—in our manufacturing facilities, our sales and
distribution organizations, our marketing groups, our staff functions,
and with our general managers. As we expand our businesses,
we are placing heightened focus on ensuring that we maintain
an inclusive environment and on developing the careers of our
associates—all with the goal of continuing to have the leadership
talent, capabilities and experience necessary to grow our businesses
well into the future. As an example, we are implementing tailored
training programs to provide our managers and senior executives
with the strategic and leadership capabilities required in a rapidly
changing environment.
At PepsiCo, everything we do is underpinned by our commit-
ment to Performance with Purpose. This means we deliver
sustainable growth by investing in a healthier future for people and
our planet. For instance, in addition to the long-term sustainability
and talent-related commitments referenced above, we also intend
to respect, support and invest in the local communities where we
operate by hiring local people, creating products designed for local
tastes and partnering with local farmers, governments and
community groups.
Performance with Purpose has been the fundamental
underpinning to our success in 2009 and has been recognized
by publications and organizations from Fortune Magazine’s
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