Pbg Annual Report AnalysisEssay Preview: Pbg Annual Report AnalysisReport this essayPepsi Bottling Group, Inc., PBG, is most established in the refreshment industry. PBG is the worlds largest manufacturer, seller and distributor of PepsiCo beverages. They have done enough research to know that “when it comes to beverages, consumers crave refreshment. They also crave variety.” Some of the major beverages that PBG markets in the refreshment industry are, of course, Pepsi, Aquafina, Mountain Dew, Sierra Mist, Lipton, Tropican, Starbucks Frappuccino, SoBe, including some only international brands like e-pura and Mirinda in Mexico. Aquafina is the leading national bottled water in the U.S. and a growing brand in Canada and Turkey. Also PBG sales of Pepsi-Cola beverages account for more than one-half of the Pepsi-Cola beverages sold in the United States and Canada and about 40 percent worldwide.
• A growing national beverage market for several U.S. states is a product of the Coca-Cola brand. Consumers have been fed up with Coca-Cola in a similar way that they began selling “juice” products during the 1970s. Coca-Cola made a significant amount of changes for a variety of markets during the 1980s and 1990s. They changed their distribution strategies to focus exclusively on PepsiCo to the extent that PepsiCo and its suppliers did not have the full market picture or the “value proposition.” The Coca-Cola line was also designed to appeal to young, non-college users, not “deteriorate consumers” and is a way for them to avoid the “overdue high” prices of those products. Coca-Cola’s emphasis on quality and value does not go unnoticed by the company’s retail store chain and the brands they sell. For example, the “Pepsi brand” brands, such as The P.C., The P.A. And other brands that are widely used as well, such as A.C., can be confusing or, at some points, even confusing for consumers who know who the brands are. PBG has been at the forefront of the refreshment movement, especially in the area surrounding the P.C., specifically PepsiCo. PBG has been known to develop its own portfolio of beverage designs, among which includes the Coca-Cola brand as it has developed products in other beverage categories including specialty drinks. Its “brand” may refer to an existing product or brand brand. PBG has made several investments and acquisitions into PepsiCo; most notably, its “Pepsi,” now named Coca-Cola, with a second company. As of right now, PBG continues to focus on expanding and expanding the portfolio of non-profit brand beverage companies and their products. PBG is also a significant supporter of the Healthy Kids Alliance, a program that develops child nutrition and sports programs. We have also worked with several beverage and beverage sales and marketing organizations to promote children’s healthy eating habits. PBG’s support for the Healthy Kids Alliance program has been critical to our efforts to help families that can not afford some form of healthy diet or supplement. We are also a leader among health care organizations within the U.S. regarding health care issues such as chronic cancer, diabetes mellitus, and HIV. We have also sponsored several health care benefits with PBG as well as individual benefits for its members and members’ parents. Since 2004 PBG has sponsored local and national events, conferences featuring health care providers and public speakers. We continue to work for the development of “The Kids at the Pump” and “Pepsi for Healthy Kids,” a national and state initiative to promote healthy, well-being among children and adolescents to encourage nutrition, physical activity, and physical education. PBG and several associated organizations are part of the “Kids at the Pump” program through the National Diet Plan. We have worked collaboratively on many initiatives to promote healthy activity and healthy eating of kids that include: Healthy Kids: The Kids at the Pump – Promoting healthy food and beverage health and well-being through education, media, advocacy and more — and providing free health education programs for parents and their children in schools across America. The Healthy Kids Kids: Promoting kids’ exercise, health, physical activity, and physical education — is an important part of the Healthy Kids Healthy Purity initiative. As of 2017, the program and the campaign organization
• A growing national beverage market for several U.S. states is a product of the Coca-Cola brand. Consumers have been fed up with Coca-Cola in a similar way that they began selling “juice” products during the 1970s. Coca-Cola made a significant amount of changes for a variety of markets during the 1980s and 1990s. They changed their distribution strategies to focus exclusively on PepsiCo to the extent that PepsiCo and its suppliers did not have the full market picture or the “value proposition.” The Coca-Cola line was also designed to appeal to young, non-college users, not “deteriorate consumers” and is a way for them to avoid the “overdue high” prices of those products. Coca-Cola’s emphasis on quality and value does not go unnoticed by the company’s retail store chain and the brands they sell. For example, the “Pepsi brand” brands, such as The P.C., The P.A. And other brands that are widely used as well, such as A.C., can be confusing or, at some points, even confusing for consumers who know who the brands are. PBG has been at the forefront of the refreshment movement, especially in the area surrounding the P.C., specifically PepsiCo. PBG has been known to develop its own portfolio of beverage designs, among which includes the Coca-Cola brand as it has developed products in other beverage categories including specialty drinks. Its “brand” may refer to an existing product or brand brand. PBG has made several investments and acquisitions into PepsiCo; most notably, its “Pepsi,” now named Coca-Cola, with a second company. As of right now, PBG continues to focus on expanding and expanding the portfolio of non-profit brand beverage companies and their products. PBG is also a significant supporter of the Healthy Kids Alliance, a program that develops child nutrition and sports programs. We have also worked with several beverage and beverage sales and marketing organizations to promote children’s healthy eating habits. PBG’s support for the Healthy Kids Alliance program has been critical to our efforts to help families that can not afford some form of healthy diet or supplement. We are also a leader among health care organizations within the U.S. regarding health care issues such as chronic cancer, diabetes mellitus, and HIV. We have also sponsored several health care benefits with PBG as well as individual benefits for its members and members’ parents. Since 2004 PBG has sponsored local and national events, conferences featuring health care providers and public speakers. We continue to work for the development of “The Kids at the Pump” and “Pepsi for Healthy Kids,” a national and state initiative to promote healthy, well-being among children and adolescents to encourage nutrition, physical activity, and physical education. PBG and several associated organizations are part of the “Kids at the Pump” program through the National Diet Plan. We have worked collaboratively on many initiatives to promote healthy activity and healthy eating of kids that include: Healthy Kids: The Kids at the Pump – Promoting healthy food and beverage health and well-being through education, media, advocacy and more — and providing free health education programs for parents and their children in schools across America. The Healthy Kids Kids: Promoting kids’ exercise, health, physical activity, and physical education — is an important part of the Healthy Kids Healthy Purity initiative. As of 2017, the program and the campaign organization
The carbonated soft drink market and the non-carbonated beverage market are highly competitive. PBG competitors in these markets include bottlers and distributors of nationally advertised and marketed products, bottlers and distributors of regionally advertised and marketed products, as well as bottlers of private label soft drinks sold in chain stores. PBGs market share for carbonated soft drinks sold under trademarks owned by PepsiCo in our U.S. territories ranges from approximately 20% to approximately 38%.
Direct competitors of PBG are Coca-Cola Bottling Co. Consolidated and Coca-Cola Enterprises Inc. Some indirect competitors are Cadbury Schweppes Americas Beverages, Groupe Danone World Water Division, Nestle, and Red Bull.
PBG competes primarily on the basis of advertising and marketing programs to create brand awareness, price and promotions, retail space management, customer service, consumer points of access, new products, packaging innovations and distribution methods. They believe that brand recognition, market place pricing, consumer value, customer service, availability and consumer and customer goodwill are primary factors affecting our competitive position.
PBG is also affected by PepsiCo. PBG must meet annually with PepsiCo to discuss plans for year and the following two years. At such meetings plans are presented in reasonable detail PBGs marketing plan, management plan and advertising plan with respect to the cola beverages for the year.
Advertising and marketing costs for 2006 were $403 million before bottler incentives received from PepsiCo and other brand owners.PBG requires substantial infrastructure investments to maintain its existing level of operations and to fund investments targeted at growing the business. Capital expenditures included in cash flows from investing activities totaled $725 million in 2006. Net cash used for investments decreased by $111 million to $731 million, principally reflecting lower acquisition costs, partially offset by higher capital spending. Net cash used for financing increased by $188 million to $371 million, driven primarily by the repayment of our $500 million note and other long-term debt, reduction in our short-term borrowings and higher dividend payments, partially offset by the proceeds from the $800 million bond issuance in March of 2006.
Cash Flows – Investments:Capital expendituresAcquisitions of bottlers, net of cash acquiredProceeds from sale of property, plant and equipmentOther investing activities, netNet Cash Used for InvestmentsCash Flows – Financing:Short-term borrowings, net – three months