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About The Quaker Oats Company

PepsiCo butts heads with its eternal rival The Coca-Cola Company for the title of world's biggest soft drinks maker. PepsiCo's beverage brands include Pepsi, Mountain Dew, Tropicana, Gatorade, and Aquafina water. The company also owns Frito-Lay, the world's #1 snack maker with offerings such as Lay's, Ruffles, Doritos, and Cheetos. The Quaker Foods unit makes breakfast cereals (Quaker oatmeal, Life), Rice-A-Roni, and Near East side dishes. Pepsi products are available in 200-plus countries, although the US accounts for nearly 60% of total sales. The company operates about half of its bottling plants and distribution facilities.


PepsiCo's pervasive presence is founded on a broad portfolio of mega brands each of which generates more than $1 billion in annual sales. Business is supported by nearly 300 manufacturing, processing, and bottling plants worldwide.

Operations are organized into six business units: North America Beverages (NAB); Frito-Lay North America (FLNA); Quaker Foods North America (QFNA); Latin America; Europe Sub-Saharan Africa (ESSA); and Asia, Middle East and North Africa (AMENA).

NAB, about a third of sales, makes and sells beverage concentrates, fountain syrups, and finished goods. Brands include Pepsi, Gatorade, Mountain Dew, Aquafina, Diet Pepsi, Diet Mountain Dew, Tropicana, and Sierra Mist. It also makes ready-to-drink tea and coffee products in conjunction with Unilever and Starbucks and has manufacturing licenses from Dr Pepper (for drink brands Dr Pepper, Crush, and Schweppes) and from Dole Food (for Ocean Spray cranberry juice).

FLNA, about a quarter of revenue, includes snack foods brands such as Lay's, Doritos, Cheetos, Tostitos, Fritos, and Ruffles, which it sells to independent distributors and retailers. In a joint venture with Strauss Group, it makes and sells Sabra dips and spreads.

The QFNA segment accounts for some 5% of sales and consists of the manufacture and distribution of cereals, rice, pasta, and other branded products. Products include Quaker-branded oatmeal, grits, rice cakes, granola, oatmeal squares, as well as Quaker Chewy granola bars. It also makes and sells Aunt Jemima mixes and syrups, Life cereal, and Rice-A-Roni side dishes.

The ESSA segment brings in about 20% of sales and consists of the manufacture and sale of its soft drink and snack brands in Europe and Sub-Saharan Africa. Additional activities include the marketing and distribution of dairy products including Chudo, Agusha, and Domik v Derevne.

Latin America and AMENA both account for around 10% of sales and make, market, and distribute PepsiCo's snack foods and beverages in the region. Region-specific brands include Toddy, Manzanita Sol, H2oh! (Latin America) and Kurkure and Chipsys (AMENA).

Geographic Reach

The US accounts for more than 55% of PepsiCo's sales. Important international markets for the company include Russia, Mexico, Canada, and the UK. PepsiCo is also active in emerging and developing markets, particularly China, India, Africa, and the Middle East.

Sales and Marketing

To promote its products, PepsiCo uses a combination of sales incentives, discounts, advertising, and other marketing activities. Advertising expenses were $4 billion-plus in 2018 and 2017.

PepsiCo's customers include wholesale distributors, grocery and convenience stores, mass merchandisers, membership stores, authorized independent bottlers, and food service distributors, including schools, stadiums, and restaurants. The company's snacks, beverages, and other products are brought to market through direct-store-delivery (DSD), customer warehouse, and distributor networks. Walmart is its largest customer, accounting for nearly 15% of its overall sales and about 20% of PepsiCo's North American business.

PepsiCo's top five retail customers account for about a third of the company's net revenue in North America.

Financial Performance

After falling from $66.7 billion to $62.8 billion between 2014 and 2016, PepsiCo's revenue has been slowly inching back up. Net income has been a little more sporadic over the past five years.

In 2018 the company reported sales of $64.7 billion, up 2% from the prior year. The growth was powered primarily by Frito-Lay North America, which saw volume growth in variety packs and the Doritos brand, and Europe Sub-Saharan Africa, which saw volume growth in both snacks and beverages in Germany, Poland, and the Netherlands, among a handful of other areas. Sales in the Quaker Foods North America and Asia, Middle East and North Africa segment both declined in 2018.

Net income that year nearly tripled from 2017 to $12.5 billion because of benefits from the Tax Cuts and Jobs Act enacted in Q4 2017. 

Cash at the end of 2018 was $10.8 billion, an increase of $112 million from the prior year. Cash from operations contributed $9.4 billion to the coffers, while investing activities added another $4.6 billion, mainly from short-term investment maturities. Financing activities used $13.8 billion for payments of long-term debt, dividends to stockholders, and stock repurchase, among other activities.


PepsiCo's growth strategy is focused on a handful of generic and well-worn keywords: Faster, Stronger, Better. But what exactly does that mean to the soda and snacks giant?

Faster for the company means investing in top-line growth (including fortifying its foundational North American businesses), creating a more consumer-centric product portfolio with innovation and modernization, and accelerating international expansion. PepsiCo's idea of Stronger is centered on cost savings, scale, and a high-performance culture as well as on honing core capabilities. Lastly, it wants to be Better by using healthier ingredients in its products and embracing advanced farming practices, water conservation, and plastic waste reduction.

The company supports these efforts organically with product launches such as Everyday Nutrition low-calorie products and premium bottled water LIFEWTR; alternative packaging initiatives for bubly, Aquafina, and other brands; and technology and data innovations to improve the supply chain and consumer targeting, among other areas. PepsiCo also makes strategic acquisitions. 

Mergers and Acquisitions

As it expands its portfolio of healthier products, PepsiCo in early 2019 acquired the CytoSport business from Hormel Foods for $465 million. The deal adds Muscle Milk and Evolve protein shakes, bars, and powders to its lineup. Later that year it agreed to acquire Pioneer Food Group, a South African consumer goods company whose brands include Weet-Bix, Liqui Fruit Juice, and Sasko bread, for $1.7 billion. The acquisition boosts PepsiCo's presence in South Africa and Sub-Saharan Africa. 

In late 2018 the company purchased SodaStream, an Israeli firm that makes an at-home drink carbonation machine. The deal is worth around $3.2 billion and extends PepsiCo's reach directly into customers' homes. 

Company Background

Pharmacist Caleb Bradham invented Pepsi in 1898 in New Bern, North Carolina. He named his new drink Pepsi-Cola (claiming it cured dyspepsia, or indigestion) and registered the trademark in 1903.

Donald Kendall, who became Pepsi-Cola's president in 1963, turned the firm's attention to young people ("The Pepsi Generation"). It acquired Mountain Dew in 1964 and became PepsiCo in 1965, when it acquired Frito-Lay.


The Quaker Oats Company

Chicago, IL 60661-3716
Phone: 1 (312) 821-1000

Firm Stats

Employer Type: Privately Owned
Chief Global Diversity Officer and Senior Vice President: Pamela Culpepper
Maintenance Captain: Ronnie Myles
Senior Vice President Law General Counse: Thomas Ryan
Employees (This Location): 1,000
Employees (All Locations): 10,000

Major Office Locations

Chicago, IL

Other Locations

Tolleson, AZ
Oakland, CA
Kissimmee, FL
Atlanta, GA
Cedar Rapids, IA
Barrington, IL
Bridgeview, IL
Danville, IL
Indianapolis, IN
Muncie, IN
Columbia, MO
China Grove, NC
New York, NY
Mountain Top, PA
Dallas, TX