While Inflation Runs Rampant, Pepsi's Leading Snack and Beverage Mix Should Serve It Well

For many consumers, the Pepsi trademark elicits images of cola containers and ads extolling the brand’s taste superiority versus Coke. While PepsiCo is still a beverage behemoth, its business now extends beyond this industry, with Frito-Lay and Quaker products accounting for over half of sales and over 65% of profits, by our estimate. A diversified portfolio across snacks and beverages is the source of many of the company’s competitive advantages, in our view. Though management missteps have stymied performance in the past, the confluence of better execution and benefits inherent to its integrated business model has allowed Pepsi to reaccelerate profitable growth, and we see plenty of room to run.