Pepsi 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

We did ok considering the environment is not so good

“We are pleased with our results for the quarter and year-to-date, particularly given the continued macro challenges we see across the globe. Specifically in developed markets, the consumer category demand continues to be sluggish and in developing and emerging markets, there is continued macro and political volatility, most notably in Eastern Europe, the Middle East and a number of markets in Latin America. In other key emerging markets, China, India and Brazil even though the political environments are relatively stable, GDP and consumer spending growth remains mixed.”

retailers value partners with strong brands

“In today’s difficult environment, retailers value the benefits of partners with strong brands and high velocity products that drive traffic, build basket size and generate attractive cash flow. And that’s exactly why our retail partners like to do business with PepsiCo.”

Productivity initiatives

“Our next generation productivity will focus on four areas: first, embedding more automation in our operations to replace labor with capital and at the same time removing bottlenecks from our operations, which will increase capacity utilization; second, expanding shared services, including global financial shared services for the handling of routine back office transaction processing; third, restructuring manufacturing to optimize our global manufacturing footprint; and fourth, restructuring our go-to-market systems to optimize our distribution network.”

Commodities prices are coming down without a doubt

“Regarding your broader question on commodities without a doubt the commodities numbers overall are coming down.”