PERFORMANCE WITH PURPOSE - PepsiCo

267419_L01_P08_15.v2.qxd 3/5/07 10:32 PM Page 14PepsiCo Beverages NorthAmerica CarbonatedSoft Drink Volume vs.Non-Carbonated SoftDrink VolumeNon-CarbonatedSoft Drinks38%PepsiCo Beverages NorthAmerica CarbonatedSoft Drink Revenue vs.Non-Carbonated SoftDrink RevenueNon-CarbonatedSoft Drinks69%Carbonated Soft Drinks62%Carbonated soft drinksgenerate the largest volumes.CarbonatedSoft Drinks31%Non-carbonated beveragesgenerate the largest revenue.we’ve recently extendedAquafina with vitaminfortifiedAquafina Alive, andwe’re now offering TropicanaOrganics and TropicanaEssentials, juices with omega-3’s, the fatty acids known forhelping to promote hearthealth. Our Propel enhancedwater brand, which wasamong the first entries intothe enhanced water category,continues to meet consumerdesires for more healthfuloptions through brandextensions like Propel Calcium.Through our North AmericanCoffee Partnership withStarbucks, we introducedStarbucks Iced Coffee as wellas Strawberries and CrèmeFrappuccino and StarbucksDoubleShot Light.Creating new products isnot the only way we buildbrands. We are experts atcapturing consumer attentionwith our brands. In 2006, wesolidified Pepsi’s popularityamong music fans whenGrammy award-winning artistMariah Carey wrote andrecorded original ringtones forthe Pepsi Cool Tones andMotorola Phones promotion.In international markets, aPepsi advertising campaignincluded an engaging themesong called “DaDaDa” thatcaught on by connectingsoccer fans around the world.We give our brands specialattention. For example, in 2006we unveiled new packagingand a new logo for Doritostortilla chips to communicatethe brand’s powerful crunchand bold flavor. We reformulatedDiet Mountain Dewand gave consumers a tasteduring the largest single-daysampling event in Pepsi history.Similarly, we kicked off thebiggest marketing campaignfor Cheetos in the brand’shistory. And keep your eyeson Fritos corn chips as wecelebrate the brand’s 75thanniversary in 2007 withspecial retro packaging.Mergers andAcquisitionsOur people have the skills topinpoint, acquire and seamlesslyintegrate businesses —big and small. This hasenabled us to successfully addlarge companies, like Quakerand Tropicana, and regularlyadd smaller “tuck-in” dealsthat enhance and expand ourexisting operations. Theseinclude our recent acquisitionsof Izze Beverage Co., NakedJuice, and Stacy’s Pita ChipCompany in the UnitedStates, as well as Star Foodsin Poland, Bluebird Foodsin New Zealand and Duyvisnuts in the Netherlandsand Belgium.We are disciplined buyers,with a rigorous process fordue diligence to ensure thatany potential acquisitionmakes complete sense fromboth a business and culturestandpoint. As diligentintegrators, we have a specialunderstanding of the entrepreneurialnature of smaller“tuck-in” acquisitions andexercise a thoughtfulapproach to helping thesenew businesses preserve andbuild upon their uniquecapabilities, such as the highlevel of involvement Stacy’shas with its consumers. Wenot only sign the deals, butwe are committed to makingthem work.Quaker Oatmeal and Tropicana Pure Premium are important brands inour health and wellness portfolio of products.14