Alcohol

Why it matters

Approach

In 2021, PepsiCo entered the alcoholic beverage distribution space in select U.S. markets through a trademark licensing deal to a third party. PepsiCo’s distribution arm, Blue Cloud Distribution, Inc. (BCD), acted as an alcohol-licensed distributor for the PepsiCo and Lipton branded alcoholic beverages manufactured and owned by The Boston Beer Company and FIFCO USA. PepsiCo does not produce any of these alcoholic beverages within company-owned manufacturing plants. Instead, the trademarks are licensed to these manufacturers who own the alcoholic products and formulas.

In 2024, BCD transitioned from acting as an alcohol-licensed distributor in the alcohol industry to a brand licensing and flavoring sales model. Under this new approach, now as Blue Cloud National, trademarks continue to be licensed to alcohol manufacturers enabling them to create new ready-to-drink alcohol products and market and sell these products, through independent wholesalers. As a result, rights for Hard Mtn Dew and Lipton Hard Iced Tea were transferred from BCD to independent wholesalers to continue to make the products available to customers. In addition, we are exploring various paths to sell alcoholic products with our trademarks in countries outside of the U.S. For example, in Canada, we executed a deal licensing the 7-Up trademark to Labatt, a subsidiary of Anheuser-Busch InBev.

Marketing

Alcohol consumption carries a unique set of risks, so we work with the alcohol manufacturer licensees in an effort to ensure responsible marketing practices consistent with industry marketing guidelines. We support the United Nations’ Sustainable Development Goal (SDG) 3 to ensure healthy lives and promote well-being for all and aim to take action to help ensure these alcoholic beverages are marketed for responsible consumption. We expect the manufacturers to adhere to best marketing practices and industry guidelines around alcoholic beverages. This includes but is not limited to:

• Differentiating the labels from non-alcoholic versions of the product;
• Clearly articulating the alcoholic content of the beverage; and
• Labeling each package with the region’s legal drinking age.