Pepsi 2015 Annual Report Download - page 10

Elevating our focus on costs
In 2014, we announced plans to deliver
$5billion in savings over five years (2015–2019),
and we are on track to do so. We have doubled
annualized productivity savings compared
with 2011, delivering approximately $3billion
in savings from 2013–2015, and more than
$1billion in savings in 2015 alone.
To build on that progress, we are doing
more with less across PepsiCo, innovating
our way to a more productive future. We are
automating our processes for packaging and
warehousing. We are making products for
one market on production lines in another,
lifting utilization rates and better integrating
our global supply chain. And we are enabling
engineers to monitor our production systems
remotely, resulting in better, faster solutions
ata lower cost.
We are also instituting Smart Spending poli-
cies to rein in expenses, as well as expanding
Lean Six Sigma training to cut waste and
boost efficiency. In fact, we trained five times
as many employees in 2015 as we did in 2010
while growing our global footprint of Lean Six
Sigma training from 3 to 50countries.
Fostering a culture of collaboration
There is a saying that culture eats strategy,
and I agree. It is critically important that we
engage all of our employees’ heads as well
as their hearts, not only building a culture
where excellence is rewarded, accountability
is enforced and collaboration is expected, but
also building a culture that is welcoming and
supportive for all of the men and women who
work here.
Exercising discipline on capital returns
We believe that disciplined, balanced capital
allocation is one of the hallmarks of a well-run
business, and we are holding ourselves to
that standard. That means reinvesting in our
business, paying dividends to shareholders,
strengthening our market positions through
acquisitions and returning residual cash to
shareholders through share repurchases. In
fact, over the past 10 years, we have returned
more than $35 billion to shareholders in the
form of share repurchases — and more than
$65 billion including dividends.
Looking ahead
These priorities — the 5C’s — are the
foundation of PepsiCo’s success and will help
guide us in the months and years to come.
But it is important for us to remember that we
are continuing to face some of the roughest
waters in a long time. A surplus of information,
much of it incomplete or inaccurate, is making
it harder rather than easier for consumers
to get the facts they need. There is a lack of
clarity about the best ways for regulators and
corpora tions to collaborate and advance a
shared agenda. Market forces too often priori-
tize quarterly returns over enduring results.
And yet, our 2015 results demonstrate our
ability to deliver strong performance in this
environment, which will remain our focus
going forward. Our shareholders should take
comfort in that fact. They should also take
comfort in something else: our aspiration
is greater than simply riding out the rough
waters around us. It is steering our vessel
safelyto new and distant shores. Thank you
for being part of this voyage and for the
confidence you have placed in PepsiCo with
your investment.
Indra K. Nooyi
PepsiCo Chairman of the Board of Directors
and Chief Executive O cer
Successful joint ventures
with Starbucks and
Unilever give PepsiCo
the leading value share
of the U.S. ready-to-
drink co ee and tea
categories, respectively.2
We continued to
expand these o erings
internationally in 2015.
Our newest food and
beverage vending
initiative that meets
increased consumer
desire for good- and
better-for-you choices
on the go.
Elevating our focus on costs
In 2014, we announced plans to deliver
$5billion in savings over five years (2015–2019),
and we are on track to do so. We have doubled
annualized productivity savings compared
with 2011, delivering approximately $3billion
in savings from 2013–2015, and more than
$1billion in savings in 2015 alone.
To build on that progress, we are doing
more with less across PepsiCo, innovating
our way to a more productive future. We are
automating our processes for packaging and
warehousing. We are making products for
one market on production lines in another,
lifting utilization rates and better integrating
our global supply chain. And we are enabling
engineers to monitor our production systems
remotely, resulting in better, faster solutions
ata lower cost.
We are also instituting Smart Spending poli-
cies to rein in expenses, as well as expanding
Lean Six Sigma training to cut waste and
boost efficiency. In fact, we trained five times
as many employees in 2015 as we did in 2010
while growing our global footprint of Lean Six
Sigma training from 3 to 50countries.
Fostering a culture of collaboration
There is a saying that culture eats strategy,
and I agree. It is critically important that we
engage all of our employees’ heads as well
as their hearts, not only building a culture
where excellence is rewarded, accountability
is enforced and collaboration is expected, but
also building a culture that is welcoming and
supportive for all of the men and women who
work here.
Exercising discipline on capital returns
We believe that disciplined, balanced capital
allocation is one of the hallmarks of a well-run
business, and we are holding ourselves to
that standard. That means reinvesting in our
business, paying dividends to shareholders,
strengthening our market positions through
acquisitions and returning residual cash to
shareholders through share repurchases. In
fact, over the past 10 years, we have returned
more than $35 billion to shareholders in the
form of share repurchases — and more than
$65 billion including dividends.
Looking ahead
These priorities — the 5C’s — are the founda-
tion of PepsiCo’s success and will help guide
us in the months and years to come. But it
is important for us to remember that we are
continuing to face some of the roughest
waters in a long time. A surplus of information,
much of it incomplete or inaccurate, is making
it harder rather than easier for consumers
to get the facts they need. There is a lack of
clarity about the best ways for regulators and
corpora tions to collaborate and advance a
shared agenda. Market forces too often priori-
tize quarterly returns over enduring results.
And yet, our 2015 results demonstrate our
ability to deliver strong performance in this
environment, which will remain our focus going
forward. Our shareholders should take comfort
in that fact. They should also take comfort in
something else: our aspiration is greater than
simply riding out the rough waters around us.
Itis steering our vessel safely to new and distant
shores. Thank you for being part of this voyage
and for the confidence you have placed in
PepsiCo with your investment.
Indra K. Nooyi
PepsiCo Chairman of the Board of Directors
and Chief Executive O cer
Successful joint ventures
with Starbucks and
Unilever give PepsiCo
the leading value share
of the U.S. ready-to-
drink co ee and tea
categories, respectively.2
We continued to
expand these o erings
internationally in 2015.
Our newest food and
beverage vending
initiative that meets
increased consumer
desire for good- and
better-for-you choices
on the go.
8 PEPSICO