Sustainable Development at PepsiCo
| Case Code: BECG122 Case Length: 17 Pages Period: 2006-2011 Pub Date: 2012 Teaching Note: Available |
Price: Rs.500 Organization: PepsiCo Industry: Food and Beverages Countries: Global Themes: Sustainability, Corporate Social Responsibility, Stakeholder Tension |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Controversies Surrounding Pepsico
Despite its spectacular turnaround, PepsiCo started facing criticism regarding the effect of its operations on the environment. In the early and mid-2000s, it faced controversies regarding the usage of water for its bottling operations which reportedly caused water shortages in some parts of India and the US. In India, PepsiCo faced controversies regarding its usage of water as water shortages were getting acute in the country due to the rapid increase in population. PepsiCo was accused of diverting water which could be used for drinking purposes for making its beverage products...
Sustainable Development Practices of Pepsico
PepsiCo has overtaken its archrival Coca Cola in 2005 and has grown to nearly twice the size of the latter. For the year 2010, Coca Cola's revenues stood at US$ 35.12 billion while that of PepsiCo stood at US$ 57.84 billion. PepsiCo's tremendous growth was possible because of a shift in its focus from the beverages business and the mergers and acquisitions it has undertaken in the 1990s and later. After overtaking Coca Cola in terms of revenues, PepsiCo decided to focus on corporate sustainability to differentiate itself from Coca Cola. The growth in its business led to more controversies regarding its operations...
Looking Ahead
PepsiCo's focus and the progress it had made on sustainable development had yielded good results, according to analysts. Despite its shift of focus from beverage business to other businesses, more than 50 percent of its revenues for the year 2010 came from its beverage business both in the US and outside the US. More than 70 percent of its revenues came from the Americas signifying the importance of home market for PepsiCo despite its global expansion. However, in recognition of the progress it had made on sustainable development, PepsiCo was named the top food and beverage company in the DJSI Food and Beverage Super sector and included in the Dow Jones Sustainability Indexes for the year 2011. It was the only company based in the US to earn the top ranking in the 19 super sectors assessed. This was the third consecutive year that PepsiCo had been named leader in the beverage sector. However, PepsiCo's successes on sustainable development did not steer it completely away from controversy. Some environmental activist groups continued to criticize its practices...
Exhibits
Exhibit I: Consolidated Income Statement of PepsiCo from 2006-2010 (In US$ Millions)
Exhibit II: Performance with Purpose
Exhibit III: Goals and Commitments of PepsiCo
Exhibit IV: 2010 Inclusion Statistics at PepsiCo
Exhibit V: PepsiCo's Mix of Net Revenue
Exhibit VI: Top 10 Carbonated Beverage Brands in the US
Exhibit VII: Chart of PepsiCo's Share Price (2006-2011)
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