Pepsi 2014 Annual Report Download - page 27

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7
Changes to the retail landscape, including increased consolidation of retail ownership, and the current
economic environment continue to increase the importance of major customers. See “Item 1A. Risk Factors
– The loss of any key customer or changes to the retail landscape could adversely affect our business, financial
condition or results of operations.” In 2014, sales to Wal-Mart Stores, Inc. (Wal-Mart), including Sam’s Club
(Sam’s), represented approximately 12% of our total net revenue. Our top five retail customers represented
approximately 31% of our 2014 North American (United States and Canada) net revenue, with Wal-Mart
(including Sam’s) representing approximately 18%. These percentages include concentrate sales to our
independent bottlers, which were used in finished goods sold by them to these retailers.
See Note 8 to our consolidated financial statements for more information on our customers, including our
independent bottlers.
Our Competition
Our beverage, food and snack products are in highly competitive industries and markets and compete against
products of international beverage, food and snack companies that, like us, operate in multiple geographies,
as well as regional, local and private label manufacturers and other value competitors. In many countries in
which our products are sold, including the United States, The Coca-Cola Company is our primary beverage
competitor. Other beverage, food and snack competitors include, but are not limited to, DPSG, Kellogg
Company, Kraft Foods Group, Inc., International, Inc., Monster Beverage Corporation, Nestlé
S.A., Red Bull GmbH and Snyder’s-Lance, Inc.
Many of our food and snack products hold significant leadership positions in the food and snack industry
worldwide. However, The Coca-Cola Company has significant carbonated soft drink (CSD) share advantage
in many markets outside the United States.
Our beverage, food and snack products compete primarily on the basis of brand recognition, taste, price,
quality, product variety, distribution, advertising, marketing and promotional activity, packaging,
convenience, service and the ability to anticipate and respond to consumer trends. Success in this competitive
environment is dependent on effective promotion of existing products, introduction of new products and the
effectiveness of our advertising campaigns, marketing programs, product packaging, pricing, increased
efficiency in production techniques, new vending and dispensing equipment and brand and trademark
development and protection. We believe that the strength of our brands, innovation and marketing, coupled
with the quality of our products and flexibility of our distribution network, allows us to compete effectively.
See also “Item 1A. Risk Factors – Our business, financial condition or results of operations could suffer if
we are unable to compete effectively.”
Mondelēz