PepsiCo's Distribution and Logistics Operations

Headquartered in New York, the US-based PepsiCo is one of the world's leading beverage and snacks food companies. In its 2002 annual report, the company claimed to have the largest share in the US beverage markets (Refer Table I).

PepsiCo served diverse markets with its six group companies - Frito-Lay North America, Frito-Lay International, Pepsi-Cola North America, Pepsi Beverages International, Gatorade/Tropicana North America and Quaker Foods North America (Refer Exhibit I). For the fiscal year ended December 2002, PepsiCo Inc. (PepsiCo) reported revenues of $25.11 billion, an increase of 6.8% from the 2002 revenues of $23.51 billion (Refer Exhibit II).

PepsiCo adapted these systems to the local conditions of the various countries in which it operated. PepsiCo's highly advanced distribution system was well supported by state-of-the-art logistics systems. PepsiCo upgraded its technical capabilities consistently in order to strengthen its logistics management activities. PepsiCo's bottlers employed wireless technologies to strengthen their distribution system and effectively serve the customers in the markets in which they operated. However, with its vast worldwide operational network and good market presence globally, PepsiCo still did not put enough effort into integrating and streamlining the operations of its various group companies/divisions.