Snack and Beverage Innovation Continues to Fuel Growth at Wide-Moat PepsiCo

Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, driving steady top-line and profit expansion in past years. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, growth initiatives in select attractive beverage subcategories (such as energy drinks) and various emerging markets (such as Latin America, Africa, and Asia-Pacific), and an integrated business model facilitating more effective commercialization.