PepsiCos Supplier Diversity Program

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PepsiCos Supplier Diversity Program

• Setting The Course For 2008 Beyond

J. Fred Canady, VP, Supplier Diversity February
21, 2008
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Brief State Of The Business
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PepsiCo has created substantial shareholder
returns over the last 5 years
12.5
Dec02
Dec07
approximately one quarter of value created over
this time from Quaker merger
China, now our 2nd largest market
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has become reality today!
whether a company views China as a
manufacturing base, an attractive market, or
both, world-class execution will be necessary to
succeed, and success in China will be needed to
survive not only there but around the globe
McKinsey Quarterly, No. 4, 2007
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Our portfolio is misaligned with some critical
consumer trends
Shift to Developing and Diversity in North
America are hand in hand
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Purpose becoming as important as Performance
Sustainability
Talent
Environment
Human
Cherish the people who make Pepsi great
Caring for our communities and our planet
Nourish the body and soul of our customers
Consumers and communities reward companies that
are concerned and responsible. -
Indra Nooyi
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This foundation work resulted in four strategic
imperatives
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PepsiCo Supplier Diversity
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Operating Principles of the PepsiCo MWBE Program

• Developing 1st Tier spending will be the priority
  objective
• Ensure majority supplier partners support our
  MWBE objectives by developing minority and
  women-owned suppliers 2nd Tier
• Require certification of MWBE suppliers annually
• Active leadership (Sr. PepsiCo Leadership
  involvement) with the major minority suppliers
  organizations (USPAAC, NMSDC, USHCC, WBENC)
• Aggressively develop and implement sustainable
  MWBE ventures that deliver competitive pricing,
  service quality
• Target large (10) and consistent overall MWBE
  annual spend growth, reviewing progress with most
  senior business leaders on a quarterly basis

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MWBE Spending Summary 1997 - 2006

• PepsiCo MWBE spend has quadrupled in size in last
  10 years
• Growth has been consistent and broadly developed
• Coca-Colas 2006 MWBE spend is equal to our 1997
  level
• PepsiCo is in the top 15 of the Fortune 100 in
  both MWBE spending and utilization

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FY 06 1,014MM
Overview- 2006
FY2006 10 Growth Goal Achieved YOY spend Growth
of 93MM or 10
1,014
921
Yr over Yr Spend Growth 10
10 Growth
41.5MM
51.8MM
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Asians Gain Share of Total M/WBE Spend
Overview- 2006
2005 SPEND DISTRIBUTION BY ETHNICITY
2006 SPEND DISTRIBUTION BY ETHNICITY
LH and AA combined YOY spend share declined by 6
from 56 to 50
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FY 2006 Asian American Spend
136.8MM, 13
Spend Breakout by Division
Yr over Yr spend type breakout distribution
136.8
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2006 Top Supplier Yr over Yr Supplier Spend
Top Spend by Commodity
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Overview 2006 YOY Spend Growth
YOY Growth by Ethnicity
10 or 93MM
FY 06 Growth 93MM
All Ethnicities experienced YOY Growth although
AA and LH spend was relatively flat caused by
large losses of spend due to certification process
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2007 MWBE Objectives

• Grow all spend by 10 in total
• Continue the certification process to insure
  accuracy of reported spends
• Focus on international expansion to support areas
  of increasing spend

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The 3Ps of China
Today we all need to win humans, environment,
talent
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