Pepsico, Inc. Case Study

Company Background

PepsiCo, Inc. is known to be one of the greatest American corporations that manufactures food, snacks, and what we all know and love, carbonated and uncarbonated drinks. PepsiCo consists of the fusion of Pepsi Cola and Frito Lay, which took place in 1965. In my tour, I learned that Pepsi-Cola was created and founded on August 28, 1898 by Caleb Bradham, who was a pharmacist from North Carolina. Later in the years, Frito-Lay was formed due to the fusion of Frito Company (founded by Elmer Doolin in 1932) and Lay & Company (founded by H.W. Lay in the same year). Since the merge of Pepsi Cola and Frito Lay, PepsiCo, Inc. has been one of the top best-selling soft drink brands in the world today. Compared to Cocoa Cola, Pepsi is always my first choice in soda.

I learned on this tour that PepsiCo’s mission, like most beverage food processing companies, is to provide their worldwide customers with foods and beverages that are reasonable in price, tasteful, and easy to get to when needed. PepsiCo provides food and beverages for any time of the day for their customers, as well as healthy snacks. I also learned that PepsiCo’s vision is called Performance with Purpose, which means to give a top-notch performance financially and be a positive influence for the industry, society and environment.

Introduction

Although PepsiCo is a global manufacturing company, I wanted to discover the following:

1. If the formula of Pepsi could be tampered with due to the operation process,

2. If Pepsi could keep up with the demand of soft drinks if equipment breaks down at any given time, and

3. If Pepsi could keep up with distribution.

During my tour, I observed the operations of the Pepsi products closely from the beginning of the Pepsi formula to the packaging of the sodas (2-liter bottles, 6-packs, 8-packs, 12-packs, 24-packs). This analysis will identify the operations and supply chain principles of the beverage food processing industry. This analysis will only include certain concepts that are relevant to the beverage food processing industry process.

Product Design

As I learned in Period 2, product design is important to every organization and company because it distinguishes its brand from others. PepsiCo has a long streamline of products such as: soft drinks, chips, healthy drinks and breakfast items. In the tour, I learned that PepsiCo is divided into three business units: PepsiCo Americas Foods, PepsiCo Americas Beverages and PepsiCo International, which breaks out into six segments called Frito-Lay North America, Quaker Foods North America, the Latin American food and snack businesses, PepsiCo Americas Beverages, Europe, and Asia, Middle East, And Africa. Each segment markets different brands that PepsiCo offer in different areas of the world to continue to make the company global. Just in the North and South American continents alone, I learned that PepsiCo has about 20 plants to produce and process the brands of Pepsi.

After listening to the overflowing stats of the company, it was evident to me that PepsiCo has invested a lot of time in getting to know what their customers need, as well as making the products accessible for them to retrieve the anytime and anywhere in the world. That is what product design is all about: mastering the brand and design of the products so it cannot be similar to any other product. It has to stand out from the others, whether it is the best or the least favorite product. Over 100 years later, PepsiCo has not only made its mark in the beverage food processing industry, but it has made its marked around the world.

In the factory, I was able to view the process from beginning to end, and I found out the following process:

1. Raw materials are blended to create the syrup for the soft drink

2. Regular or diet?

a. If the beverages that are being made are diet, then it goes to Step 3.

b. If the beverages that are being made are regular, then it goes to Step 4.

3. Artificial sweetener is added to the syrup to mix in the batch tanks.

4. The syrup is packaged for it to be shipped to be bottled or in a can.

5. The syrup is received by the workers who are there to package it in the cans or bottles.

6. Regular or diet?

a. If the beverages that are being made are regular, then it goes to Step 7.

b. If the beverages that are being made are diet, then it goes to Step 8.

7. Sugar is added to the syrup.

8. Both syrups are mixed with distilled water in a container that balances out the proportions of the syrup and water. Then, the mixture from that balance is carbonated.

9. Drinks are ready to be filled in the bottles or cans, and ready for shipment to the merchants or customers.

Looking at how Pepsi was made and packaged was pretty awesome considering it’s a soda that I love to drink anytime, anywhere. However, looking at the process made me wonder if anything could change the taste of the syrup that was mixed. Was there equipment that could have conflict with the making of the syrup before it is packaged and shipped to the merchants and customers? When looking at the process thoroughly, I realized that it’s possible that the containers that the syrup is mixed in could have affected the taste of the syrup due to it being made of steel like the making of wine. There could be a metallic taste that is added to the Pepsi formula that the developers may have overlooked. The tour guide mentioned that there was an incident that took place recently this year when iron and chromium particles were found in the Pepsi bottles due to equipment breaking down in one of the manufacturing plants. Due to this incident, Pepsi had to do a recall for the Pepsi bottles to be returned to where they purchased them. In the manufacturing process, the syrup could also be changed due to too much sugar or sweetener being added. If the machine isn’t setup correctly for the right measurement of sugar and sweetener to be added, it could change the standard formula of Pepsi. Who’s to say that that is how Pepsi made its different brands of products? The extra ingredients of iron, chromium, sugar and/or sweetener that may have accidentally leaked in the formula could have