PepsiCo is the second largest food and beverage company across the world which uses excellent strategies to dominate the food and beverage industry. The company’s food and drink products have a strong presence in the United States and across the globe. Let’s now see more about the company’s SWOT analysis of Pepsico, its financials, and much more in one go.
About PepsiCo
Pepsico is the best food and beverage company across the globe. The company has headquarters in New York and is well known for its unique soft drink products as well as other food products. Numerous brands come under Pepsico which also include Lays, Cheetos Doritos, Ruffles, etc.
The company has a very huge portfolio of products and has leveraged the latest highly profitable business model. In this blog, we will include the detailed PepsiCo SWOT analysis that will highlight the strengths, weaknesses, threats, and opportunities of the company.
PepsiCo at a Glance
| Founder | Caleb Bradham |
| Year of Establishment | 1893 |
| Annual Revenue (as of FY24) | $91.471 billion |
| Net Profit (as of FY24) | $. 2,042 |
| Origin | United States |
| Type of Company | Private |
| Total no. of employees | 318,000 |
| Total assets (as of FY24) | $100.040 B |
SWOT Analysis of PepsiCo
Strengths of PepsiCo
Strengths of the PepsiCo due to which it has gained a strong brand position include –
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Great market share
Pepsico is one of the most famous and globally known brands in the F&B industry. The company has a higher reputation and brand value of approximately $20 billion dollars. Today, the company has been ranked among the top 30 Most Valuable Brands as per the Forbes list.
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Diversified portfolio
In 2015 Pepsico had a mild decrease in smooth drinks sales. As India is a developing country many health-conscious customers are also growing. But, even today, PepsiCo has products that come under the top 5 drinks sold in the country.
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Visionary leadership & Loyalty
Indra Nooyi, the dynamic key person of PepsiCo, has controlled the company’s different functions in the food and beverage space. Due to the excellent strategies, PepsiCo has gained a very huge loyal customer base. Its soft drinks have a very tasty flavor which is why the customers do not prefer to change the brands. They are one of the most robust brands in terms of the bottled water and drinks category.
Weaknesses of PepsiCo
The weaknesses of PepsiCo include –
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Perception of PepsiCo products
PepsiCo involves different food and drink products and most of these are termed junk food. Considerations may be made about the brand value of the company as such kind of unhealthy comments may impact the company’s reputation and sales.
Customers of the younger generation are becoming more health conscious and are inclined towards consuming the nutritional value of the products. However, a number of PepsiCo products are salty, fatty, and sugary, which are termed to create different health problems like heart disease, diabetes, obesity, etc.
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Different lawsuits
Coca-Cola and PepsiCo are the big rivals of each other and have faced many lawsuits related issues. Some lawsuits may prove damage to the reputation of the company specifically in the perception of the company investors and customers.
In 2020, Pepsi and Coca-Cola were sued by an environmental group in California for clearing and misleading customers about their plastic products’ sustainability mode.
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Dependency on carbonate drinks
Even though PepsiCo has an extensive drink and food products portfolio it depends on carbonated drinks. About 40% of its revenue comes from beverages sold in the North American region. This showcases its strongest revenue segment. However, this turns out to be the company’s weakness as trends show that carbonate drinks may not be preferred by consumers who are opting for healthy drinks.
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Value Addition
Pepsi has famous commercials that may be used and focused in the direction of youngsters full stop but it is not recognized to show value advertising which is one of the important features of the company’s rival Coca-Cola.
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Brand ambassador reviews
Inappropriate feedback or bad overall performance by top celebrities or personalities may harm the brand image of PepsiCo as they are the face of the firm. Also,over-dependence on celebrities is also a massive risk for the company.
Opportunities for PepsiCo
PepsiCo has some major opportunities that may turn fruitful for the company’s growth.
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Online & e-commerce customers
The present digital market has great opportunities for different businesses including the food and beverage industry. A number of customers are online today which makes online channels for buying their requirements. It clearly shows that the company may also get a better audience that may fulfill their needs through online channels.
It is worth noting that the big beverage companies have already started making online campaigns by partnering with big online retailers like Flipkart, Amazon, Walmart, Swiggy, and more.
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Health & Beverages market
Pepsico has suffered a lot of brand damage since a number of customers believe that its products are not healthy. But on the other side, these customers would go for organic or healthy foods as well as drinks.
This presence is a very unique opportunity for the company to gain more customers. The company has already made an entry into this concept with its plant-based food products. This way the company can expand and bring products that will not only meet customer demand but will also match with the sustainability goals.
Threats to PepsiCo
Threats to PepsiCo include –
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Changing customer choices
Pepsico has had a fair share of the market and popularity since its establishment. But customers are constantly changing their choices due to a number of factors that include health factors, economic or lifestyle factors as well. These changes in food consumption may be a threat to Pepsico’s strong position in the industry.
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Severe competition
The f&D industry has numerous players that have intense competition with PepsiCo. The competition with Coca-Cola has intensified since the past failures as the new market players disrupt the conventional Business models.
The pricing strategy of PepsiCo also needs careful consideration as customers are getting very price-sensitive nowadays. Also, also the company should have a balance between high-quality products and stay competitive with respect to the value and price.
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Changing government rules and regulations
The food and beverage industry’s undercover regulations may impact business operations. Generally, these regulations are specifically crafted to protect the customers.
But this may become a major threat to the company. Some nutritional labeling regulations suggest food companies offer detailed nutritional data on their products. the company may get affected by these as they are not necessarily the healthiest to the users.
The government regulations also include labor, environmental, and marketing regulations that potentially create disaster for the top players in the food and beverage industry.
Top Competitors of Pepsi
Here are the top 5 Competitors of Pepsi –
- Coca-Cola: This is the major competitor of PepsiCo in the beverage market and offers different products including carbonated and non-carbonated drinks like juices, bottled water, soft drinks, etc.
- Nestle: It is also a big giant in the food and beverage industry and competes directly with PepsiCo throughout different categories like coffee, bottled water, snacks, etc.
- Unilever: Unilever is also a competitor of PepsiCo in different categories like beverages, snacks, ice cream, etc. Unilever has a very extensive product spanning different food and beverage areas.
- Mondelez International: This competes with PepsiCo in the snacks and sweets segment.
- Keurig Dr Pepper: It is a major competitor in the sector and offers different varieties of carbonated soft drinks mixers juices etc.
Conclusion
Pepsico is the largest food and beverage firm in the world and has a great market cap of approximately $250 billion. As of now they have achieved great success through different marketing campuses and have a very great customer base.
On the other hand, the company has numerous sustainability practices that are being questioned by the government and also there is intense competition from top players like Red Bull, Coca-Cola, etc. Opportunities like expansion in the commerce sector, developing markets and organic market trends give the company an opportunity to stay ahead of the market position.