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PepsiCo International’s balanced and diverse snack and beverage portfolio had a good year. It delivered strong growth from treats to healthy eats. This thriving business spans Europe, the Middle East, Asia, Africa and Australia, serving 86 percent of the world’s population. With per-capita consumption still relatively low in many of these markets, we have a strong opportunity to drive sales ahead of GDP growth.

This year we broadened our beverage portfolio by partnering with The Pepsi Bottling Group to acquire Russia’s leading juice company, Lebedyansky, by acquiring V Water in the United Kingdom and by expanding our successful Lipton Tea partnership with Unilever. In the snack business, we acquired Bulgaria’s leading nuts and seeds producer, and we introduced a variety of local flavors, including Lay’s Shashlyk in Russia and Lay’s Cool Blueberry in China. In India, we introduced Kurkure Naughty Tomato and Lay’s Balsamic Blast and Spunky Pimento flavors; and our Doritos brand helped drive volume in the Middle East and South Africa. Together, these initiatives helped PepsiCo International revenues grow by 19 percent and core operating profit by 16 percent.*

To sustain our worldwide growth, we announced significant investments in key countries like Brazil, India, Mexico and China. In India and Brazil, we are combining capacity expansion and research and development (R&D) with sustainability efforts as we grow in those regions. Building on a brand history of more than 100 years in Mexico, we are investing over the next five years in R&D, manufacturing and distribution, marketing and advertising. And in China—one of our fastest-growing markets—we are funding capacity expansion, R&D, increased distribution, brand building, agricultural sustainability and resource conservation.

All over the company, we have Performance with Purpose as our mission. And the way we achieve it, all over the world, is always to encourage new ways of working. Innovation is our lifeblood—it drives success in all our businesses.

That is why we implemented a Productivity for Growth initiative across all sections of our business. Over the next three years, our productivity measures are expected to cumulatively free up more than $1.2 billion. That money will allow us to step up investments in long-term product development, innovation and brand building. Our productivity savings will also enhance our operating agility and create some breathing room to respond to the changing economic environment. And, as long as that innovation is driven through the company, we will deliver the demands of Performance with Purpose.

2008 was a year in which our mission could easily have been abandoned. The extraordinary circumstances would have resulted in it being abandoned if it were not already embedded into our culture. So, during 2008 we stayed true to our beliefs, even as the backdrop got tougher.

For example, we never took our eyes off the sustainability agenda that underpins our commercial success. We have now driven sustainability all the way through the business. It is a part of what we do, not an addition to what we do.

To promote human sustainability, we worked within World Health Organization policies to teach children the benefits of nutrition and inspire them to be more active. This work complements and extends our success in transforming our broad portfolio of beverages, snacks and foods, to ensure it delivers everything from treats to healthy eats.

To sustain the environment for future generations, we stepped up our global efforts to conserve water and energy and worked on lightweighting our packages, starting with new packaging for Aquafina that contains 35 percent less plastic.

To sustain our world-class talent, we’re developing “PepsiCo University,” a new learning management system that brings together functional and leadership training for associates around the world.

Our Performance with Purpose mission is not confined to PepsiCo associates alone. Even retired members of the PepsiCo family have joined our purpose movement, banding together as the PepsiCo Service Corps to further our goals and ideals in the communities we serve.  more >

 

*For a reconciliation to the most directly comparable financial measure in accordance with GAAP, see “Reconciliation of GAAP and Non-GAAP Information.”