Pepsi 2014 Annual Report Download - page 32

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12
our ability to develop sweetener innovation; our ability to improve the production and packaging of our
products; and our ability to respond to competitive product and pricing pressures. For example, our growth
rate may be adversely affected if we are unable to maintain or grow our current share of the liquid refreshment
beverage market in North America, or our current share of the snacks market globally, or if demand for our
products does not grow in developing and emerging markets.
In general, changes in product category consumption or consumer demographics could result in reduced
demand for our products. Consumer preferences may evolve due to a variety of factors, including: the aging
of the general population; consumer concerns or perceptions regarding the nutrition profile of certain of our
products, including their caloric content, or perceptions (whether or not valid) regarding the health effects
of ingredients or substances present in certain of our products, such as 4-MeI, acrylamide, artificial sweeteners,
caffeine, high-fructose corn syrup, saturated fat, sodium, sugar, trans fats or other product ingredients,
substances or attributes, including genetically modified ingredients; packaging materials; changes in package
or portion size; changes in in-home consumption patterns; changes in social trends that impact travel, vacation
or leisure activity patterns; changes in weather patterns or seasonal consumption cycles; negative publicity
(whether or not valid) resulting from regulatory action, litigation against us or other companies in our industry
or negative or inaccurate posts or comments in the media, including social media, about us, our products or
advertising campaigns and marketing programs; consumer perception of social media posts or other
information disseminated by us or our employees, agents, customers, suppliers, bottlers, distributors, joint
venture partners or other third parties; consumer perception of our employees, agents, customers, suppliers,
bottlers, distributors, joint venture partners or other third parties or the business practices of such parties; a
downturn in economic conditions; or taxes or other restrictions imposed on our products.
Any of these changes may reduce consumers’ willingness to purchase our products. See also “Changes in
the legal and regulatory environment could limit our business activities, increase our operating costs, reduce
demand for our products or result in litigation.”, “Imposition of new taxes, disagreements with tax authorities
or additional tax liabilities could adversely affect our business, financial condition or results of operations.”,
“Our business, financial condition or results of operations could suffer if we are unable to compete
effectively.”, “Unfavorable economic conditions may have an adverse impact on our business, financial
condition or results of operations.” and “Any damage to our reputation or brand image could adversely affect
our business, financial condition or results of operations.”
Our continued success is also dependent on our product and marketing innovation, including: maintaining
a robust pipeline of new products; improving the quality of existing products; and the effectiveness of our
product packaging, advertising campaigns and marketing programs, including our ability to successfully
adapt to a rapidly changing media environment, including through use of social media and online advertising
campaigns and marketing programs.
Although we devote significant resources to the actions mentioned above, there can be no assurance as to
our continued ability to develop, launch and maintain successful new products or variants of existing products,
our ability to introduce new products or variants of existing products in a timely manner or our ability to
correctly anticipate or effectively react to changes in consumer preference or develop and effectively execute
advertising and marketing campaigns that appeal to consumers. Our failure to make the right strategic
investments to drive innovation or successfully launch new products or variants of existing products could
decrease demand for our existing products by negatively affecting consumer perception of existing brands
and may result in inventory write-offs and other costs that could adversely affect our business, financial
condition or results of operations. See also “Any damage to our reputation or brand image could adversely
affect our business, financial condition or results of operations.”
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