One billion times a day, in 200 countries and territories around the world, PepsiCo provides consumers with affordable, aspirational and authentic foods and beverages. Our consumers are refreshed, rejuvenated and restored by PepsiCo’s beloved snack, beverage and nutrition brands. That is the Power of PepsiCo.
(PepsiCo, Inc. 2011 Annual Report)
Dear Fellow Shareholders,
I am pleased to report that we have made strong progress as a company in the fiscal year of 2011, despite the rising economy. We at PepsiCo designed and created mega brands successful and loved around the world. Focusing on innovation for a new generation, we are staying on the forefront of consumer needs through high productivity.
PepsiCo represents a global corporation with over 22 mega brands, each accumulating over $1 billion revenue in 2011. PepsiCo combines two basic global consumer needs, beverages and food consumption, to create a brand that can share its wealth and effect communities through multiple facets.
Along with maintaining a successful global brand, we continually increase investment in company R&D and actively work to understand our customers’ needs. As we operate on a corporate level as one, we understand the Power of One and capitalize on understanding that influence. Research shows that about 50 percent of people who choose to buy a salty snack will buy a beverage as well. PepsiCo understands its consumer behavior and through the Power of One, consumers can receive all of their congruent brands and needs.
Here at PepsiCo we understand that leadership and a great team lead to a great product “from seed to shelf.” The men and women of PepsiCo enable the development and production of innovative and culturally accurate products for the market. Responsible for creating retail sales revenue of over $300 million every day, we pride ourselves on our high-quality work facilities along with our fair and appreciative treatment of our employees in all global regions.
Through innovation, we bring consumers new and exciting experiences. This year, PepsiCo reached coverage of 50 percent revenue coming from outside of the U.S. Products such as PepsiMax, Quaker cookies and the Gatorade G series have allowed consumers to expand their product consumption and diversity while still maintaining a brand loyalty to PepsiCo.
Guided by Performance for Purpose, we maintain that a good company enjoys what’s good for the company as well as society. As a global corporation determined to ensure our presence and products within a society, we maintain innovative, accessible and successful distribution to fit all of our consumer needs.
As such a large corporation, we pride ourselves in our ability and execution to provide catered innovation and products in specific communities. We are at the forefront of innovation and take that step further by using local teams to inform and detract data from each city. We do this so that we can produce the most efficient returns on our products and cater to the unique needs and desires of our local communities.
By catering to each community’s preferences and culture, PepsiCo’s able to give all our consumers the best products for their needs. Along with consumer satisfaction, we use localized ingredients from various societies to produce the best beverage and food products on a global scale; sharing our materials and influence worldwide.
This fiscal year we incurred charges of $383 million for restructuring and impairment costs which align with our multi-year productivity plan. Our productivity plan includes action in innovation and creating stronger consumer interaction, leveraging new technologies to strengthen our market value of food, snacks and beverages.
In 2011 we also incurred merger and integration charges of $329 million related to acquisition fees. PepsiCo allocated expenses and advisory of acquisitions with PBG, PAS, and WBD. Acquisition costs have significantly dropped between the 2010 and the 2011 fiscal year.
Recorded for 2011, around 50 percent of net revenue was generated in the United States; incurring revenue over $20,000 more than any other country. This fiscal year also brought an increase of Operating costs. Total operating profit increased 16 percent with a margin increase of 0.1 percentage points, both primarily driven through net revenue growth.
Net revenue grew 14 percent on a core basis.
Core division operating profit rose 7 percent.
Cash returned to Shareholders – $5.6 billion
Consumers and brand loyalists are the heart and soul of this company as we rely on the continued support of our ever-changing consumers.
Chairman and Chief Executive Officer