PepsiCo's Distribution and Logistics Operations

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Case Details:

Case Code : OPER031
Case Length : 12 Pages
Period : 1991 - 2003
Organization : PepsiCo.
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Food & Beverages

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Pepsico's Distribution Operations

Since its inception, PepsiCo attached a lot of importance to its distribution operations. Each day, the company's products such as snack foods and beverages, were distributed through various retail channels in the US and across the world. PepsiCo's distribution system was aimed at making available all or most of the products in its portfolio within a distance easily reachable by consumers. PepsiCo was conscious of the need to adapt its distribution systems according to the needs and preferences of global customers. Based on its experience, PepsiCo had developed various distribution models to offer its products and services to customers in the US. These included the Direct Store Delivery (DSD), Broker Warehouse Distribution (BWD) and Vending & Food Service (V&FS) systems...

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Pepsico's Logistics Operations

In order to manage its distribution systems effectively, PepsiCo had put in place advanced logistics systems. PepsiCo sold beverage concentrate to bottlers, who added carbon dioxide, sweetener and water to make beverages and beverage syrup. Syrup was either sold directly to the fountain accounts or was combined with carbonated water for bottling. Bottling companies were (with a few exceptions) owned and operated by local companies in the countries where PepsiCo operated...

The Efforts Continue

Through their use of the most modern technology in recent years, PepsiCo and its bottlers were able to improve their distribution and logistics management operations significantly. To further improve the market penetration of its products globally, PepsiCo launched two new distribution methods in the initial years of the new millennium. These were the chilled DSD system and the hybrid system.

The chilled DSD system was a relatively small distribution method, created for items which required continuous refrigeration. This was primarily created for the fruit juices product line...


Exhibit I: Pepsico Group of Companies
Exhibit II: Pepsico's Financials
Exhibit III: Pepsi Cola - Soft Drink Distribution Channels in the US
Exhibit IV: Frito Lay - Snack Foods Distribution Channels in the US

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