In a significant move towards the deployment of digital technologies, PepsiCo announced its strides in advancing its digital transformation journey.
The US-based beverage and snack giant revealed its focus on building and leveraging data-driven capabilities aimed at facilitating quicker decision-making processes, optimizing go-to-market distribution strategies, and enhancing in-store execution.
With a reported sales figure of $91.471 billion in 2023, compared to $86.392 billion in the preceding year, PepsiCo showcased robust growth. However, PepsiCo’s sales for Q4 of 2023 saw a slight decline, falling to $27.85 billion from $27.996 billion.
This is the first drop in 14 quarters. Some industry analysts believe that the price hike has impacted its business. In January, Carrefour, Europe’s largest food retailer, said it would not be stocking PepsiCo’s brands due to unacceptable price increase.
The soda and snacks giant forecast annual organic revenue growth of at least 4 percent, compared to the 9.5 percent growth reported for fiscal 2023.
Ramon Laguarta, Chairman and Chief Executive Officer of PepsiCo, in its earnings report, attributed the company’s impressive full-year performance to strategic investments in advertising, digitalization, and go-to-market execution.
PepsiCo does not reveal the company’s spending in digital transformation or AI in order to enhance business growth.
PepsiCo said investment in AI (Artificial Intelligence) has become a vital tool for business and employees. AI is a fundamental part of PepsiCo’s digital transformation as the company builds on its digital resources: Starting with the best time to plant potatoes all the way to predicting how many bags of Lay’s should go on store shelves, AI is reshaping how the company plans, makes, moves, sells and delivers products.
Seth Cohen, the Chief Information Officer (CIO), leads PepsiCo’s IT function across all business units. Through a network of associates, IT focuses on delivering and supporting capabilities that improve business processes, enable associates to connect and collaborate more easily, collect and mine data for analytical insights, and enhance performance across all aspects of PepsiCo’s value chain.
Athina Kanioura, Chief Strategy and Transformation Officer, oversees PepsiCo’s strategy to win both as a total company and in key markets, including digitalization strategy. She leads company-wide transformation— ensuring that scale is leveraged as it focusses on accelerating profitable growth and identifying areas of cost efficiency and optimization— in addition to overseeing Data Products, Platforms, and Talent.
Athina Kanioura in a blog post in 2021 said the most innovative AI technology allows people to be more productive by removing repetitive tasks and allowing individuals to focus on more skilled functions, like interpreting data insights and driving business decisions.
Ramon Laguarta emphasized the role of digitalization in driving growth across PepsiCo’s diverse portfolio. Notably, Propel witnessed double-digit net revenue growth, while Pepsi and Gatorade each experienced high single-digit growth over a 52-week period.
Ramon Laguarta outlined PepsiCo’s commitment to expanding its presence in the away-from-home channel through targeted execution and scaled distribution of its brands. He also highlighted the company’s focus on seizing new consumer occasions and whitespace opportunities through digital advancements and differentiated experiences with its portfolio innovation.
Furthermore, PepsiCo reiterated its dedication to enhancing core operating margins, particularly within PepsiCo Beverages North America. The company aims to achieve this by tailoring revenue management capabilities across brands, channels, and packages, accelerating holistic cost management initiatives, optimizing advertising and marketing spend, and modernizing and digitalizing its supply chain.
Among its business investment priorities, PepsiCo emphasized plans to bolster manufacturing, distribution, and go-to-market capacities to support continued growth. The company also highlighted ongoing efforts in digitalization, aimed at driving productivity and enhancing capabilities in areas such as consumer insights, trade promotion management, and demand forecasting and supply planning.
PepsiCo’s strategic focus on digital transformation underscores its commitment to staying at the forefront of innovation in the ever-evolving consumer goods industry. As digital technologies continue to reshape the landscape, PepsiCo’s proactive approach positions it well to navigate the challenges and opportunities of the digital age.