Pepsi 2015 Annual Report Download - page 22

Table of Contents
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Customer Warehouse
Some of our products are delivered from our manufacturing plants and warehouses to customer warehouses.
These less costly systems generally work best for products that are less fragile and perishable, and have lower
turnover.
Distributor Networks
We distribute many of our products through third-party distributors. Third-party distributors are particularly
effective when greater distribution reach can be achieved by including a wide range of products on the
delivery vehicles. For example, our foodservice and vending business distributes beverages, foods and snacks
to restaurants, businesses, schools and stadiums through third-party foodservice and vending distributors and
operators.
Ingredients and Other Supplies
The principal ingredients we use in our beverage, food and snack products 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. We also use water in the manufacturing of our products. 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 the vehicles delivering our products. We employ specialists to secure adequate supplies of many of these
items and have not experienced any significant continuous shortages that would prevent us from meeting
our requirements. 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 derivative instruments, including swaps
and futures. 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. In addition, we continue to make investments to improve the sustainability and resources of our
agricultural supply chain, including by developing our initiative to advance sustainable farming practices by
our suppliers and expanding it globally. See Note 10 to our consolidated financial statements for additional
information on how we manage our exposure to commodity costs.
Our Brands and Intellectual Property Rights
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, Crunchy, Diet Mountain Dew, Diet Mug, Diet Pepsi, Diet 7UP (outside the United
States), Diet Sierra Mist, Domik v Derevne, Doritos, Duyvis, Elma Chips, Emperador, Frito-Lay, Fritos,
Fruktovy Sad, Frustyle, G Series, G2, Gatorade, Grandma’s, Imunele, Izze, Kas, Kurkure, Lay’s, Life,
Lifewater, Lubimy, 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 various DPSG brands, including Dr Pepper in certain markets, Crush and Schweppes. Joint ventures in
which we have an ownership interest either own or have the right to use certain trademarks, such as Lipton,