Making wine with potatoes, pushing facial expressions, wrapping potato chips, serving new decompressed drinks... Pepsi's 2021 is a little "stuff" | Pepsi's annual inventory

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from product innovation to strategic layout, and finally return to the guiding ideology of sustainable development, what did PepsiCo do in 2021?

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Text: Carol he

Source: foodaily daily food (ID: foodaily)

On the 40th anniversary of its roots in China, PepsiCo has accelerated its localization process in China.

Ramon laguarta, chairman and CEO, attended the 2021 meeting of China Development Forum, which was the first time that PepsiCo executives attended the China Development Forum. In November, PepsiCo announced the appointment of Ms. Xie Changan as CEO of Greater China. This time, PepsiCo has set up a separate CEO of Greater China and appointed local professional managers. PepsiCo’s attention to the Chinese market is obvious.

In 2021, Pepsi continued to promote new products in China. Pepsi Cola successively launched wild cherry flavor and White Peach Oolong flavor of Pepsi Cola Taiqi series; At the same time, “bubble smile fun bubble” is introduced to enter the field of sugar free gas bubble; Leshi launched the three flavors of mellow chestnuts, cherry blossom rice wine and raw bayberry in spring and the summer barbecue flavor series. Together with haohuanluo, it launched snail powder potato chips and put on a new expression to wrap potato chips

At the time of China’s grand plan, PepsiCo is also promoting the transformation and layout of its brand business in the global market. Despite the unpredictable supply chain and cost environment, PepsiCo’s profit growth in 2021 is still very strong with the support of its strong beverage layout and snack business.

With the New Year approaching, foodaily made a comprehensive review of PepsiCo’s brand and product upgrading iteration, investment and financing, major strategies and other contents in 2021. It is hoped that through the analysis of the business changes and product layout of the global food and beverage giant group, the development trend of the food industry can be followed, and the experience and reflection in the deep shaping of brand value can be summarized.

From overseas to China, PepsiCo’s growth momentum is a little fierce

The shadow of COVID-19 continues to shroud, the imbalanced recovery in the international market and the business interrupted by weather disasters have not hindered the steady growth of Pepsi. In fiscal year 2021, PepsiCo’s revenue in the first three quarters reached US $54.226 billion, a year-on-year increase of 13.17%; The net profit was US $6.296 billion, a year-on-year increase of 19%. The annual organic revenue growth guideline also increased to 8% from the 2.4% expected at the beginning of the year.

The remarkable results were attributed to the growth of the food and beverage business. In the first three quarters as a whole, PepsiCo’s food business increased by 2% and beverage brought an increase of 11%. Especially in the North American market, the organic revenue of PepsiCo beverage department and fidoli food department maintained strong growth for three consecutive quarters.

In terms of regions, PepsiCo’s net income in Africa, the Middle East and South Asia increased by 33% to US $1.66 billion in the third quarter; Net income in Latin America increased by 27% to US $2.1 billion, Europe increased by 9% to US $3.61 billion, while sales in Asia Pacific, Australia and New Zealand and China increased by 27% to US $1.14 billion. China has become one of the important growth engines.

It is worth mentioning that in addition to strong growth in revenue, PepsiCo also topped the 2021 annual list of the top 100 global food and beverage released by food engineering last year, successfully replacing Nestle, which previously held the throne.

Source: Food Engineering

Firmly grasp the pleasure,

“Old” faces radiate “fresh” vitality

PepsiCo owns many world-famous brands, such as Leshi, Doritos, surf, Pepsi Cola and so on. Last year, PepsiCo beverage department and fidoli food department in North America maintained stable growth, which is inseparable from these brands to grasp the essence of the core value of conveying the sense of pleasure, and constantly refresh the brand image through the path of taste innovation, diversified packaging combination products and strong brand activation, so as to meet the changing consumer preferences.

Product innovation, delivering freshness with new tastes and functions

Take MTN dew, the No. 1 flavor carbonated soft drink brand in the United States, for example. In the second half of 2021 alone, the brand launched mysterious flavor products such as apple, kiwi fruit and gingerbread cookies suitable for Halloween and holiday season. And after more than a decade, it added a new permanent “watermelon” flavor to its beverage product portfolio for the first time.

Using unique flavor innovation to interact with consumers has become an important means for the brand to continuously absorb powder. Every year, MTN dew will release Limited mysterious tastes to guide consumers to share their guesses about tastes on social media, triggering a discussion boom.

Source: MTN

Pepsi Cola, which is very familiar to consumers all over the world, also launched the mango flavor of Pepsi Cola in 2021, which is the first new permanent flavor Cola launched by Pepsi brand in five years. At the same time, the Zero sugar variety was released together with the taste. Mango flavor is the most perfect match with Pepsi Cola after a large number of fan tests. Pepsi also launched a special social media activity to help single dogs find their perfect match through (drinking Pepsi Cola).

Source: Pepsi

Leshi is also commendable in product innovation. In addition to the pattern innovation in taste, Leshi will also consider how to combine the traditional fun of potato chips with the health and functional needs of consumers. For example, the purple French fries launched by Leshi China in 2021 set the taste as novel and wind grapefruit flavor. Using purple potato rich in anthocyanins as raw material, without adding artificial pigment, the composition is simple and crisp. Each box contains 5 independent small packages, which is convenient for storage and can better control calorie intake. It is designed to capture young people in detail.

Photo source: Leshi

Break the traditional cognition and constantly broaden the brand boundary

PepsiCo has been looking for innovative ways to bring new fun to consumers, not stick to the traditional product matrix and scenes, and constantly refresh the consumer cognition.

For example, at the end of 2021, Leshi cooperated with Boston Beer to launch the wine made from potatoes. The product caused a sensation in the North American alcohol market, and the product priced at $40 was sold out within hours of its launch. This product is carefully prepared by Portland potato vodka and vodka distilled from Leshi’s proprietary potato. After four distillation, it has a crisp and clean aftertaste.

Source: Lay’s

When you enjoy any food, a simple Pepsi Cola is the perfect dining partner. On May 3, 2021, PepsiCo launched PEP’s place, a fast-food restaurant that puts coke first in terms of menu and experience, in order to emphasize the versatility of coke in any catering scene. Overturning the traditional ordering process, consumers first choose the Pepsi beverage they want and select food according to the tips of the beverage, so as to enhance the overall dining experience.

Source: Pepsi

Watch the energy drink segment,

Betting on bubble water, wine mixing and other diversified scenes

According to the report released by fior markets, the global functional beverage market is expected to grow from US $125.39 billion in 2020 to US $216.7 billion in 2028, with a CAGR of 7.08% during the forecast period from 2021 to 2028. Energy drinks and sports drinks account for the main share. Focusing on the $100 billion market of energy drinks, PepsiCo continued to launch new products and ploughed into multiple sub circuits during the year.

For example, as consumers increasingly look for convenient ways to support mental endurance and relaxation in daily life, or seek alternatives to alcoholic beverages, PepsiCo has entered the field of functional beverages through the launch of soulboost functional bubble water brand.

Source: soulboost

In March 2021, PepsiCo cooperated with NBA star LeBron James to launch MTN dew rise energy energy drink, which aims to provide mental stimulation and immune support. The drink contains no added sugar and contains 25 calories and about 180 mg of caffeine (77 mg in the original mtndew bubble water), vitamins A and C, antioxidants, citicoline, zinc and juice ingredients. “LeBron is the epitome of energy. He has gained his legendary status by grasping the training every morning”, which complements this energy drink to meet the functional needs of morning refreshing, enhanced concentration and immune support.

Source: MTN

At the sports drink track, PepsiCo’s Gatorade brand has launched the latest gatorlyte electrolyte drink, which takes reducing sugar and increasing electrolyte content as the most key features. The company said, Gatorlyte is designed for athletes looking for “quick rehydration”. Gatorlyte offers cherry lime, orange and strawberry kiwi fruit flavors. It contains less sugar than ordinary Gatorade and has five electrolyte mixtures, including sodium, potassium, calcium, chloride and magnesium. Each 20 ounce bottle contains 50 calories and 12 grams of added sugar, compared with 48 grams of added sugar in the original Gatorade.

Source: gatorlyte

As consumers pay more and more attention to functional drinks containing health and health ingredients, especially those conducive to normal immune function, PepsiCo’s lifewtr brand has extended its products for the first time since its establishment in 2017, launched lifewtr immune support functional drinks, and took the lead in meeting this growing demand through industry-leading innovation. The product formula contains 10% of the daily recommended zinc content. The pH of this beverage is in equilibrium, made of purified water and added electrolytes to enrich the taste.

Source: lifewtr

In addition to children’s and adult drinks, PepsiCo also paid attention to the middle-stage youth consumer groups and launched frutly moisturizing juice for the first time. Frutly drinks are made from fruit juice, water and electrolyte magnesium and potassium, contain vitamins C and E, and do not contain added sugar or artificial sweeteners. These drinks have strawberry kiwi fruit, fruit punch and apple grape flavors.

Frutly was created in response to the obvious gap in the normal temperature fruit juice track to meet the desire of both parents to provide more nutritious beverage choices for their families. At the same time, the product abandons the juice box and juice bag in childhood and adopts bottled products to find a product form closer to the mature lifestyle of teenagers. Frutly fills this gap by providing a refreshing taste, nutritional value and moisture without adding sugar or artificial sweeteners.

Image source: frutly

In addition to continuing to plough deeply on the track of energy drinks and sports drinks, PepsiCo has also conducted a deeper excavation and Research on the subdivided needs of consumers in popular categories such as coffee and sparkling water. For example, PepsiCo expanded the bubble aquatic products matrix in 2021 and added new varieties containing caffeine. Each 12 ounce can contains 35 mg of caffeine without calories, sweeteners or artificial flavors to meet the energy needs of bubble water lovers.

Source: busy

In addition, in February 2021, aiming at the development opportunity of increasing family cocktail consumption in the U.S. market, PepsiCo launched a new series of non-alcoholic cocktail mixers – Neon zebra, an incoming cocktail mixers category. It can be used as a modern alternative to complex cocktail formula. When 7.5 ounces of neon zebra per can is mixed with users’ favorite spirits, two delicious cocktails can be easily prepared. The neonzebra blender is made from real fruit juice, contains no artificial sweeteners and does not compromise on taste. This cocktail mixer has four flavors: Margarita, strawberry Daiquiri, mogito and whiskey acid.

Steady growth of key and healthier business structure

In addition to sparing no effort in strategic leverage and potential categories, PepsiCo also adjusted and optimized its business structure, withdrew from the fruit juice business that has suffered losses for years, and continued to catch big fish in the healthy transformation of food and beverage.

Slash the juice business with “uncertain future”

In July 2021, PepsiCo sold some juice assets in North America and Europe to private equity firm Pai partners for $3.3 billion to optimize its portfolio. The agreement includes a controlling interest in Tropicana, naked and other selected juice brands in North America, as well as an irrevocable option to sell certain juice businesses in Europe.

Source: foodbusiness

PepsiCo revealed that the net income reported by the juice business in 2020 was about US $3 billion, and the operating profit margin was lower than the company’s annual operating profit margin. The sale will enable it to focus on expanding its healthier snack, zero calorie beverage and healthy product portfolio.

PepsiCo’s divestment is part of the general trend of beverage categories and also reflects the uncertain factors in the development of fruit juice. Although the non trade sales of fruit juice in the United States increased in 2020, and consumers seek more vitamin C to provide immune support, in the long run, due to the sugar content, fruit juice still has health hidden advantages in the consumption port.

Promise to reduce sugar in beverages and accelerate the introduction of healthy snacks

In the second half of 2021, PepsiCo announced a series of commitments, including reducing the sugar content of beverages by 25% by 2025 and launching more nutritious snacks in the EU by 2025.

Compared with the baseline in 2019, PepsiCo seeks to reduce the average added sugar level of its entire soft drink series (including Pepsi Cola, Lipton iced tea and 7up) by 25% by 2025 and 50% by 2030.

At the same time, the company also plans to increase the sales of snacks rated B and above in Nutri score nutrition labeling system by more than ten times by 2025. As part of its push, PepsiCo Europe said it plans to expand healthier snacks to a $1 billion product portfolio by 2030 through measures such as redesigning existing products and introducing existing healthy snack brands into more markets and new snack series.

In 2021, PepsiCo’s ketogenic snack brand Hilo life launched tortilla chips prepared with skimmed almond powder. Each product contains 3 grams of net carbohydrates, 9 grams of protein and no added sugar.

Amanda Cheung, brand director of hilolife, said, “We found that almond powder is a very popular ingredient and used this insight to develop truly unique products that provide protein content and 3 grams of net carbohydrates. We recognize that this is a good opportunity for innovation to bring our consumers a ketone friendly snack with the flavor and texture they desire.”

Image source: Hilo

PEP + is planning,

Accelerate the transformation into a sustainable development company

On September 26, PepsiCo officially announced that PEP + is planning to carry out the strategic transformation of its overall business with sustainable development as the core, so as to further supplement and enhance PepsiCo’s strategic framework. PepsiCo hopes to bring positive changes to mankind and even the earth and realize value creation and growth by following the earth’s ecosystem to operate its business.

As a global food and beverage giant and an active participant in the transformation of the global food system, PepsiCo will plan a new business line under the guidance of PEP + program, that is, from purchasing raw materials, manufacturing and selling products in a more sustainable way to encouraging consumers to contribute to the sustainable development of mankind and the earth through its iconic brand, Then to support communities and improve people’s livelihood in the whole supply chain.

Ramon laguarta, chairman and CEO, photo source: PepsiCo

PepsiCo is planning to be driven by three pillars: agriculture, value chain and products:

(1) ZhengChi agriculture extends the practice of renewable agriculture to an area of about 7 million acres equal to the company’s agricultural footprint.

(2) The positive value chain will achieve net zero emission in 2040; Achieve positive water purification with less water consumption and higher water use rate; By 2030, the packaging of each product in the global food and beverage product portfolio will be reduced by 50% and the use of primary plastics; US $570 million will be invested to promote the construction of a culture of diversity, justice and inclusiveness.

(3) ZhengChi products will continue to develop the food and beverage product portfolio in the following ways to make it more conducive to the long-term development of the earth and mankind: add more diversified ingredients to the products; Give priority to the development of chickpea, vegetable protein and whole grain products; Accelerate the achievement of the set scientific objectives; Expand the business model without or almost without disposable packaging.

Holding agriculture, value chain and products

Source: Pepsi

PepsiCo has been investing in breakthrough food packaging technology and is currently promoting a fully compostable packaging bag made of plant materials. Starting with frito lay’s botanical brand “off the eaten path”, this industrialized compostable packaging will be sold at whole foods in the United States from September. Considering the importance of creating a circular food packaging system, PepsiCo also announced its willingness to cooperate with other companies and license the same technology free of charge.

PepsiCo also plans to actively expand its sodastream business worldwide. Sodastream, acquired by PepsiCo in 2018, has a household carbonation system without the use of disposable plastic bottles. In addition to adding taste options such as PepsiCo Zero sugar, Lipton and buy to the sodastream product portfolio, PepsiCo also plans to expand to functional beverages through its sodastream professional platform. Through the expansion of sodastream, PepsiCo hopes to eliminate more than 200 million plastic bottles by 2030.

“Pep + is the future of PepsiCo – a fundamental shift in what we do and how we create growth and shared value centered on sustainability and human capital,” Mr. laguarta said. “It reflects a new business reality, and consumers are more and more interested in the future of the earth and society.”

“Imagine that Leshi will start with potatoes that can be grown sustainably in the field of renewable energy, then process and deliver them to consumers in a forward supply chain of clean zero and clean water, and sell them in bio compostable bags. Compared with similar products in the market, it has the lowest sodium content, which is the first potato chip in the future. This is the way PEP + improves human beings, the earth and our business, which can Imagine the scale and impact once applied to all 23 billion dollar brands of PepsiCo. “

Summary

Whether it is through the continuous adjustment and upgrading of well-known brands according to popular elements, or by means of new brands releasing new products to fill the space of subdivided demand, PepsiCo has always implemented the principle of focusing on consumers, insight into the general environment and development trend of the industry, and timely adjust and optimize the product portfolio to make up for its own disadvantages.

Standing on the shoulders of the “giant”, we have seen the air outlet of energy drinks. What changes will the food and beverage industry usher in in 2022 and how will PepsiCo respond? We’ll see.

reference material:

[1] PepsiCo announces new strategy for sustainable development: PepsiCo’s ongoing plan (PEP +)

[2] Pepsi Cola overcomes covid compensation and supply interruption

[3] With the acceleration of organic revenue growth in the second quarter, Pepsi Cola raised its guidelines

[4] PepsiCo’s net income increased by 11.6% in the third quarter

[5] “Bubble drinks usher in a new player: deconstructing the digital growth Code of bubble smile fun” 36 krypton

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