How The PepsiCo Supply Chain Uses Cooperation, Integration, and Innovation To Streamline Operations

5/19/24, 11:06 AM How the PepsiCo Supply Chain Uses Cooperation, Integration, and Innovation to Streamline Operations
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How the PepsiCo Supply Chain Uses Cooperation, Integration, and Innovation to Streamline Operations
How the PepsiCo Supply Chain Uses

Cooperation, Integration, and
Innovation to Streamline Operations
Hugo Britt, Melissa Epifano
11/22/2023 | 5 min read
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Image Credit: Morning Brew / Unsplash
As the world’s second-leading beverage and snack food company, PepsiCo’s streamlined
supply chain strategy is a key aspect of the company’s success. Originally known as Pepsi-
Cola, the brand has managed to retain its competitive advantage despite new faces in the
global market, a worldwide pandemic, and ever-increasing food prices.
To maintain steady growth, PepsiCo has focused heavily on acquisition, the soda giant has
become much more than its signature drink; it now owns Frito-Lay, Gatorade, Tropicana,
Lipton, and Quaker Foods, to name just a few.
https://www.thomasnet.com/insights/pepsico-supply-chain/ 1/11
With so many brands under its umbrella, it has mastered supply chain operations and
production processes and has even aimed for sustainability measures along the way. Read
on for a peek at the PepsiCo supply chain and the tech it’s developing.
Adapting to Food and Beverage Industry Demands

Supply chain efficiency and business operations aren’t the only things PepsiCo has had to
focus on. In recent years, as consumers demand healthier, more nutritious snacks, PepsiCo
has made moves to reduce the amount of sugar and saturated fat in its products, without
sacrificing taste. The company has also expanded its product line to include juices and
coconut water. These noncarbonated products, however, demand more complicated
supply chains.
As PepsiCo continues to grow and evolve, responding to changes in the market and shifting
consumer demands, its supply chain management system has evolved as well. Let’s take a
closer look at some of its differentiating features and what is driving supply chain efficiency
for the mega-corporation.
PepsiCo’s Supply Chain Management Strategies
Image Credit: Shutterstock/oasisamuel
PepsiCo’s overall philosophy of cooperation, integration, and innovation helps ensure its
varied and complex supply chain remains stable, resilient, and flexible.
As a vast, multinational company, Pepsi must input, analyze, and act on an enormous
amount of data to properly manage the flow of its food and beverage products – each with
its own specific needs. For instance, some products require cold chain logistics, while
others require ingredients sourced from multiple regions around the world.
In addition to coordinating numerous suppliers, manufacturers, shippers, warehousing

managers, and retailers, PepsiCo’s supply chain strategies also must account for potential
disruptions.
These disruptions to the supply chain could be for a variety of reasons, such as seasonal
sourcing requirements, weather and climate change, and shifts in demand. Regardless of
what happens, it needs an on-time delivery network to get the company’s products on
store shelves.
Human Rights
PepsiCo has numerous policies and standards in place to ensure the safety, health,
and well-being of every supplier. It has a global supply chain and business partners and
distribution centers all around the world, thus it requires top-tier human resources and
management.
The Global Code of Conduct, for example, lays out clear guidelines for all of PepsiCo’s
suppliers. Touching upon labor practices, environmental management, and anti-corruption
practices, among others, the code of conduct is adjusted yearly as appropriate. A 24/7
anonymous hotline is available for every partner worldwide.
Pepsi also has a standalone human rights policy, guided by the United Nations Universal
Declaration of Human Rights. The company is a signatory to the UN Global Compact,
demonstrating its commitment to universally accepted standards of fair labor practices
and worker rights.
Digitization and Technology
Image Credit: Shutterstock/The Image Party
PepsiCo has been increasingly focused on investing in digital tools and advanced
technologies to create a more efficient, streamlined supply chain.
Specifically, the company is zeroing in on data integration to create a clearer picture of the
individuals and households buying PepsiCo products. Not only could this help the business
meet consumer demand in the short term, but it could also allow for better long-term
strategizing and forecasting.
More sophisticated data analytics also help PepsiCo’s distributors and retailers track
inventory. By improving ordering algorithms, stores can put in much more accurate orders,
accounting for sales histories and purchasing trends. This aids in creating a streamlined,
cost-efficient chain.
Environmental Impact and Sustainability
Image Credit: Shutterstock/JHVEPhoto
PepsiCo has implemented several policies over the years to create a more sustainable,
environmentally friendly supply chain.
In 2017, for example, the company began its Sustainable Farming Program in India. This
ambitious initiative is focused on promoting responsible agricultural practices that will lead
to better crop yields and improve farmers’ livelihoods.
While it helps farmers and local communities, it’s also built to protect ecosystems and
lessen its environmental impact.
By demonstrating next-generation farming practices and technologies, for example, the

PepsiCo team in India helps farmers develop the knowledge and skills they need to
succeed in an increasingly tech-driven world.
Lessons to Learn from the PepsiCo Supply Chain

Operation
Image Credit: Shutterstock/Jonathan Weiss
For companies looking to strengthen and fortify their supply chains, PepsiCo can offer
many useful examples. Its focus on new technologies, in particular, has enabled the
company to predict purchasing trends.
Along with the aforementioned digital tools and tech, Pepsi has been experimenting
with 3D printing – even creating several rigid potato-chip prototypes to test preferences
among consumers.
While this kind of experimentation with production may not be within reach for smaller
businesses, paying attention to emerging tech is key for businesses looking to stay ahead
of the crowd.
How Data Drives Supply Chain Strategy

Harnessing the power of data, however, is something every company should already be
tapping into. Today’s sophisticated data collection and analysis tools make it easier than
ever for businesses to create highly accurate forecasts, prepare for dips and spikes in
demand, and pinpoint areas for improvement in the supply chain.
Finally, the company’s commitment to social and environmental responsibility is indicative

of a shifting tide, as today’s consumers increasingly look to support businesses whose
values align with their own.
How COVID-19 Affected the PepsiCo Supply Chain

and Food and Beverage Industry as a Whole
Image Credit: Shutterstock/Jonathan Weiss
PepsiCo is used to dealing with supply chain disruptions; as a major international

corporation, natural disasters are par for the course. But the COVID-19 crisis was
something else entirely that completely flipped the supply chain process on its head all
across the beverage industry.
For global actors such as PepsiCo, the crisis has presented unique challenges and
opportunities to identify areas for improvement.
To ensure a streamlined, efficient supply chain, PepsiCo taps into lean methodologies—but
during the pandemic, every link in its supply chain was being tested.
Going forward, PepsiCo may choose to keep more inventory on hand, allowing for quicker
responses in the event of future disruptions.

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5/19/24, 11:06 AM How the PepsiCo Supply Chain Uses Cooperation, Integration, and Innovation to Streamline Operations

Suppliers By Category, Company or Brand

Industry Insights Supply Chain

How the PepsiCo Supply Chain Uses

Image Credit: Morning Brew / Unsplash

Adapting to Food and Beverage Industry Demands

PepsiCo’s Supply Chain Management Strategies

Image Credit: Shutterstock/oasisamuel

In addition to coordinating numerous suppliers, manufacturers, shippers, warehousing

Digitization and Technology

Image Credit: Shutterstock/The Image Party

Environmental Impact and Sustainability

Image Credit: Shutterstock/JHVEPhoto

By demonstrating next-generation farming practices and technologies, for example, the

Lessons to Learn from the PepsiCo Supply Chain

Image Credit: Shutterstock/Jonathan Weiss

How Data Drives Supply Chain Strategy

Finally, the company’s commitment to social and environmental responsibility is indicative

How COVID-19 Affected the PepsiCo Supply Chain

Image Credit: Shutterstock/Jonathan Weiss

PepsiCo is used to dealing with supply chain disruptions; as a major international

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