Pepsi 2015 Annual Report Download - page 28

Table of Contents
11
Item 1A. Risk Factors.
In addition to the other information set forth in this Annual Report on Form 10-K, you should carefully
consider the following factors that could have a material adverse effect on our business, financial condition,
results of operations or the price of our common stock. The following information should be read together
and in conjunction with “Forward-Looking Statements,” “Item 1. Business,” “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial
statements and the accompanying notes thereto. The risks below are not the only risks we face. Additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial may also adversely
affect our business, financial condition, results of operations or the price of our common stock.
Demand for our products may be adversely affected by changes in consumer preferences or any inability
on our part to innovate or market our products effectively, and any significant reduction in demand could
adversely affect our business, financial condition or results of operations.
We are a global food and beverage company operating in highly competitive categories and markets and we
rely on continued demand for our products. To generate revenues and profits, we must sell products that
appeal to our customers and to consumers. Any significant changes in consumer preferences or any inability
on our part to anticipate or react to such changes could result in reduced demand for our products and erosion
of our competitive and financial position and could adversely affect our business, financial condition or
results of operations. Our success depends in part on our ability to anticipate and effectively respond to shifts
in consumer trends and preferences, including increased demand for products that meet the needs of consumers
who are concerned with: health and wellness (including products that have less sodium, added sugars and
saturated fat); convenience (including responding to changes in in-home and on-the-go consumption patterns);
or the location of origin or source of the ingredients and products. Our success also depends on: product
quality; our ability to extend our portfolio of products in growing markets and categories; our ability to
respond to cultural differences and regional consumer preferences; our ability to monitor and adjust our use
of ingredients to respond to applicable local regulations; our ability to develop or acquire new products that
are responsive to certain consumer preferences; our ability to develop a broader portfolio of product choices
and continue to increase non-carbonated beverage offerings and other alternatives to traditional carbonated
beverage offerings; our ability to develop sweetener alternatives and 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 or snacks market, or if demand for our products does
not grow in developing and emerging markets.
In general, changes in consumption in our product categories or consumer demographics could result in
reduced demand for our products. Consumer preferences have been evolving, and are expected to continue
to 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 flavors and colors, artificial sweeteners, aspartame,
caffeine, high-fructose corn syrup, saturated fat, sodium, sugar, trans fats or other product ingredients,
substances or attributes, including genetically engineered ingredients; taxes or other restrictions imposed on
our products; consumer concerns or perceptions regarding packaging materials, such as with respect to the
environmental sustainability or chemical makeup thereof; changes in package or portion size; 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