Over the past five years,Pepsico (
) has basically tripled its sales in emerging and developing
markets. No surprise, then, that the company continues to target
both areas for growth.
Earlier this month, the company announced a big expansion in
India. It plans to spend $5.5 billion by 2020 to build its
presence in the fast-growing market. The money will be spent on
new products, agriculture programs, selling infrastructure and
Developing and emerging markets have significant growth
potential for Pepsico thanks to an expanding middle class, which
is fueling demand for convenience food and beverages.
In addition to India, Pepsico is expanding in other emerging
countries such as China, Brazil and Africa as well as developing
markets including Russia and Mexico
Pepsico is lot more than just a soda company. Good thing, too,
because its North American soda business continues to struggle as
consumers shift away from high-calorie drinks.
In October, Pepsico reported third-quarter earnings of $1.24 a
share, up 3% from a year ago. Sales rose 2% to $16.9 billion. Its
snacks business offset weakness in the U.S. soda market. CEO
Indra Nooyi said carbonated beverages now make up about 40% of
its North American drinks business, down from more than 50% a
Analysts remain encouraged by a strong brand portfolio,
geographic diversity, high return on equity and cash flow.
Its 22 brands generate more than $1 billion each in annual
retail sales. Major brands include Pepsi-Cola, Frito-Lay,
Gatorade, Tropicana and Quaker.
In July, activist shareholder Nelson Peltz said Pepsico should
buyMondelez International (
) and spin off its soft-drink business.
Earlier this month, Pepsico paid a quarterly dividend of 57
cents a share. It currently yields 2.7%.