I am not a huge commercial boycott supporter as it relates to social media and wokeness, but war is different and this story of Pepsi’s behavior in Russia merits your most thoughtful consideration. I draw no conclusions and challenge you to evaluate the information and decide for yourself.
Ramon Laguarta, Chief Executive Officer, Chairman of the Board, Pepsico, $28.4MM total compensation 2023
You are an independent thinker, right?
OK, dear reader, here they are:
1. Russia (a country of 150MM in 1994 and 144MM today) invaded its smaller, peaceful and non-threatening neighbor, Ukraine (37MM people), on 24 February 2022 in the largest military attack since World War II.
What followed thereafter was medieval and barbaric, but that is who Russia is.
2. Russia — pretending to act through intermediaries — attacked the Ukrainian oblasts (political subdivisions like states) of Donetsk and Luhansk on 10 April 2014.
Look at the lower right corner of Ukraine. The three oblasts — Donetsk, Luhansk, Kherson — connect Russia to Crimea.
3. Russia annexed (seized) the peninsula of Crimea in February/March 2014.
Russia’s grand plan was to seize Donetsk, Luhansk, Kherson oblasts to make a land bridge to Crimea. That is still their most important military goal.
Many businesses re-evaluated their position in Russia as a result of this horrific attack.
Yes, Pepsi. Pepsi is big in Russia. Russia is Pepsi’s second largest market in the world. [Some say it is #3, but I think actual performance in 2023 moved it into #2. Still it is a big deal.]
1. Pepsi is the second largest food and beverage company in the US and the largest in Russia. It is a member of Russia’s top ten multinational companies operating in the Russian Federation.
2. Pepsi is a massive company with operations in more than 200 countries and 23 brands (Pepsi, Diet Pepsi, Gatorade, 7 UP, Lay’s, Doritos, Tostitos, Lipton Tea, Aquafina, Quaker Oats, Fritos, Sierra Mist and more) with more than $1,000,000,000 in gross revenue.
Not 23 total brands, but 23 with sales in excess of $1,000,000,000.
With total revenue approaching $100,000,000,000 globally, some 5% of that came from Russian operations. Pepsi makes an annual profit in the $10,000,000,000 range.
2. Pepsi operated 19 plants (beverages, chips, milk, milk products) in Russia and paid $810,000,000 in 2021 taxes to the Russian Federation.
3. In March 2022, Pepsi announced it would leave the Russian economy except for milk oriented products focused on babies (baby formula, baby food).
Ahhh, dear reader, you think something went amiss, do you? You have a good nose for a story, don’t you?
1. Pepsi did NOT cease production of any of its Russian brands — Pepsi, Mountain Dew, 7 UP, Miranda, chips — as it promised. It continued to “produce and distribute” contrary to its March 2022 promise.
2. In September 2022, Pepsi announced it was ceasing production of its “branded” lines. Sounds good, right?
3. What they really did was to REBRAND some of their products.
Pepsi Cola is now Evervess
7UP and Miranda are now Frustyle
Same production lines, same channels of distribution, different names.
4. It is worth noting that Pepsi products actually are part of Russian soldiers’ ration packets. Pepsi, in part, feeds the Russian army. Wow!
I, of course, have not been to Russia to personally confirm these assertions, but there are organizations like:
Yale School of Management, Chief Executive School of Leadership
Kyiv School of Economics, “Leave Russia” Project
that confirm this information and stores in Russia are still selling old inventory of Pepsi under its original name and new inventory under its re-branded name.
These are hyperlinks you can explore. They are both quite authoritative and you will be surprised as to which companies continue business as usual and those who have paused new capital investment, scaled back or paused operations, announced their withdrawal (500) and completed withdrawal (350).
Not only did Pepsi mislead the world as to its intentions — this is my opinion only — but it also benefited from its position in the market with gross revenue and profits rising during the chaos of the Ukraine war.
Pepsi did not withdraw and its sales revenue and profits INCREASED.
All the while Pepsi — headquartered in Purchase, New York — is paying Vladimir Putin’s Russian Federation $1,000,000,000 in income taxes that are used to fund the brutal war on Ukraine.
You can’t make this stuff up department: again, Pepsi products are part of a Russian soldiers’ ration kit. WTF, Pepsi?
In my mind when I see a Pepsi product, I do not see their logo. Instead, I see a picture of Russian soldiers killing babies, kidnapping children, murdering civilians, torturing soldiers, and making war on museums, schools, hospitals, and residences.
Personally, I will make another choice. Will I drink a Pepsi, eat some Lay’s chips, or quaff a Mug Root Beer?
I think you know the answer to that question.
OK, here is the bottom line — it is not unreasonable to believe that an American company (and the personal compensation of its CEO and Chairman of the Board) with operations in Russia has benefitted from the suffering in Ukraine while funding Putin and the Russian killing machine to the tune of $1,000,000,000 annually for the last two years.
If I have this wrong, I invite any Pepsi spokesman to write a blog post discrediting my assertions and righting the record.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.
Heineken, the world’s second largest brewer, walked away from its Russian brewing operations and sold them for one Euro while taking a substantial writeoff.
Shame on you, Pepsi.
