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PepsiCo Inc PEP Stock Quote

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Morningstar‘s Stock Analysis PEP

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Wide-Moat Pepsi’s Beverage and Snack Portfolio Continues to Attract Consumers Despite Price Hikes

Erin Lash, CFA Sector Director

Business Strategy and Outlook

| Erin Lash, CFA |

For many consumers, the Pepsi trademark elicits images of cola containers and ads extolling the brand’s taste superiority versus Coke. While PepsiCo is still a beverage behemoth, its business now extends beyond this industry, with Frito-Lay and Quaker products accounting for over half of sales and over 65% of profits, by our estimate. A diversified portfolio across snacks and beverages is the source of many of the company’s competitive advantages, in our view. Though management missteps have stymied performance in the past, the confluence of better execution and benefits inherent to its integrated business model has allowed Pepsi to reaccelerate profitable growth, and we see plenty of room to run.

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Company Profile PEP

Business Description

PepsiCo is one of the largest food and beverage companies globally. It makes, markets, and sells a slew of brands across the beverage and snack categories, including Pepsi, Mountain Dew, Gatorade, Doritos, Lays, and Ruffles. The firm uses a largely integrated go-to-market model, though it does leverage third-party bottlers, contract manufacturers, and distributors in certain markets. In addition to company-owned trademarks, Pepsi manufactures and distributes other brands through partnerships and joint ventures with companies such as Starbucks. The firm segments its operations into five primary geographies, with North America (comprising Frito-Lay North America, Quaker Foods North America, and North America beverages) constituting around 60% of consolidated revenue.

Contact
700 Anderson Hill Road
Purchase, NY, 10577
T +1 914 253-2000
Industry Beverages - Non-Alcoholic
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 25, 2022
Employees 309,000

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