PepsiCo's Brand Diversity Boosts Sales

November 24, 2016

Unlocking Word Meanings

Read the following words/expressions found in today’s article. 

1. credit (something) to (something/someone) / ˈkrɛd ɪt tu / (idiom) – to give praise where it is due
Example: In his speech, the CEO credited the company’s success to its employees.

2. flagship / ˈflægˌʃɪp / (n.) – the best or most important in a group
Example: The company’s flagship product sold nearly 3 million units worldwide.

3. take a hit / teɪk ə hɪt / (idiom) – to be affected negatively or suffer a loss
Example: Cigarette companies took a hit when smoking was linked to certain cancers.

4. offset / ˌɔfˈsɛt / (v.) – to make the effects of something insignificant or negligible
Example: Loss from poor soda sales were simply offset by strong juice sales. 

5. opt /ɒpt/ (v.) – to choose to do something
Example: The company offered to buy Joe’s business but he opted not to sell it.


Read the text below.
PepsiCo, maker of popular soda brand Pepsi, increased its 2016 sales forecast after experiencing a boost in this year’s third quarter earnings.   

In September, the company forecasted that this year’s earnings per share will grow by 10% instead of its previous forecast of 9%. The company credits its success to a boost in sales in key overseas markets, which include China, Mexico, and Russia.

Almost half of the American company’s sales came from abroad. Majority of overseas sales came from soda, potato chips, and juice. On the other hand, the company’s noncarbonated beverages proved successful in the Northern American market.

In recent years, the company’s flagship product, Pepsi, has taken a hit, along with the entire carbonated drinks industry when consumers started turning to healthier alternatives. However, despite shifting demands in the market, the company’s sales remain strong due to its brand diversity. PepsiCo’s losses in soda sales were offset by strong sales in the company’s healthy drinks.

Aside from soda, the company also offers several healthier options, such as energy drinks, juices, and water, through its brands Gatorade, Tropicana, and Aquafina. PepsiCo also has organic beverage brands under its name, like Naked Juice and O.N.E. Coconut Water.

In addition to having a wide array of beverages, PepsiCo’s boost in sales can also be credited to having a successful snacks unit, Frito-Lay. While consumers are opting for healthier drinks, sales of the company’s snacks, which include Cheetos and Doritos, remain unaffected.

Viewpoint Discussion

Enjoy a discussion with your tutor.  

Discussion A

·         Given the chance, would you buy shares in PepsiCo? Why or why not?
·         Which is more important to check when buying shares from a company – its current earnings or the products it offers? Why?

Discussion B
·         Should companies stick to producing only their flagship product, or should they offer a wide array of products? Cite examples to justify your answer.
·         What is the best way for companies to learn more about consumer needs? 

November 24, 2016