Pepsi 2013 Annual Report Download - page 23

5
Holding Corp. (Tingyi). AMEA’s net revenue was $6.5 billion, $6.7 billion and $7.4 billion in 2013, 2012
and 2011, respectively, and approximated 10% of our total net revenue in 2013 and 2012 and 11% of our
total net revenue in 2011.
See Note 15 to our consolidated financial statements for additional information about our transaction with
Tingyi in 2012.
Our Distribution Network
Our products are brought to market through direct-store-delivery (DSD), customer warehouse and distributor
networks. The distribution system used depends on customer needs, product characteristics and local trade
practices. These distribution systems are described under the heading “Our Distribution Network” contained
in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Ingredients and Other Supplies
The principal ingredients we use in our food and beverage businesses are apple, orange and pineapple juice
and other juice concentrates, aspartame, corn, corn sweeteners, flavorings, flour, grapefruit and other fruits,
oats, oranges, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and wheat.
Our key packaging materials include plastic resins, including polyethylene terephthalate (PET) and
polypropylene resins used for plastic beverage bottles and film packaging used for snack foods, aluminum
used for cans, glass bottles, closures, cardboard and paperboard cartons. Fuel and natural gas are also important
commodities for us due to their use in our facilities and in the trucks delivering our products. We employ
specialists to secure adequate supplies of many of these items and have not experienced any significant
continuous shortages. Many of these ingredients, raw materials and commodities are purchased in the open
market. The prices we pay for such items are subject to fluctuation, and we manage this risk through the use
of fixed-price contracts and purchase orders, pricing agreements and derivatives. In addition, risk to our
supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers.
When prices increase, we may or may not pass on such increases to our customers. See Note 10 to our
consolidated financial statements for additional information on how we manage our exposure to commodity
costs. See also “Item 1A. Risk Factors – Our operating results may be adversely affected by increased costs,
disruption of supply or shortages of raw materials and other supplies.”
Our Brands
We own numerous valuable trademarks which are essential to our worldwide businesses, including Agusha,
Amp Energy, Aquafina, Aquafina Flavorsplash, Aunt Jemima, Cap’n Crunch, Cheetos, Chester’s, Chipsy,
Chudo, Cracker Jack, Diet Mountain Dew, Diet Mug, Diet Pepsi, Diet Sierra Mist, Domik v Derevne, Doritos,
Duyvis, Elma Chips, Emperador, Frito-Lay, Fritos, Fruktovy Sad, Frustyle, Gatorade, G2, G Series,
Grandma’s, Imunele, Izze, Kurkure, Lay’s, Life, Lubimy Sad, Manzanita Sol, Marias Gamesa, Matutano,
Mirinda, Miss Vickie’s, Mother’s, Mountain Dew, Mountain Dew Code Red, Mountain Dew Kickstart, Mug,
Munchies, Naked, Near East, O.N.E., Paso de los Toros, Pasta Roni, Pepsi, Pepsi Max, Pepsi Next, Propel,
Quaker, Quaker Chewy, Rice-A-Roni, Rold Gold, Rosquinhas Mabel, Ruffles, Sabritas, Sakata, Saladitas,
Sandora, Santitas, 7UP (outside the United States) and 7UP Free (outside the United States), Sierra Mist,
Simba, Smartfood, Smith’s, Snack a Jacks, SoBe, SoBe Lifewater, SoBe V Water, Sonric’s, Stacy’s, Sting,
SunChips, Tonus, Tostitos, Trop 50, Tropicana, Tropicana Farmstand, Tropicana Pure Premium, Tropicana
Twister, Vesely Molochnik, Walkers and Ya. We also hold long-term licenses to use valuable trademarks in
connection with our products in certain markets, including Dole and Ocean Spray. We also distribute Rockstar
Energy drinks, Muscle Milk protein shakes and certain DPSG brands, including Dr Pepper, Crush and
Schweppes, in certain markets. Joint ventures in which we have an ownership interest either own or have
the right to use certain trademarks, such as Lipton, Müller, Sabra and Starbucks. Trademarks remain valid
so long as they are used properly for identification purposes, and we emphasize correct use of our trademarks.
We have authorized, through licensing arrangements, the use of many of our trademarks in such contexts as