PepsiCo Inc.

Another critical element of PepsiCo's growth plan is to continue to improve its North America beverage business. After revenue declines of 2% in 2017, growth returned to the segment in the second half of 2018. It has steadily improved into the first quarter of 2019 with continued investment in marketing and new product launches. Last year's rebound benefitted from pricing, which offset modest volume declines by 200 basis points (bps). Pricing should continue to benefit future growth; however, product-mix improvements and new-product innovation in faster-growing beverage categories such as flavored water and energy will also have to accelerate. To that end, PepsiCo has recently entered the flavored and carbonated water markets with products like Bubly. In addition, it is investing

...International expansion of PepsiCo Inc.'s snack portfolio and higher growth from its North America beverage business will be key to the company meeting its ambitious constant-currency growth targets. PepsiCo is guiding to 4% organic top-line growth in 2019, which is higher than the company's average organic growth of just 3% over the past two years. The company expects to achieve the higher growth by increasing capex to expand production and distribution capacity and by continuing to reinvest its productivity savings in innovation, product development, and advertising and marketing (A&M). These investments should lead to above-average, mid-single-digit percent top-line growth of its snack products internationally. According to Euromonitor, the savory- snack category should continue to outperform the broader soft- drink and staple-food categories. Savory snacks are forecasted to grow by about 2% annually in the U.S. and Western Europe. The company should outpace those growth rates by at...

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