PepsiCo — Private Cards#

CONFIDENTIAL TO PEPSICO. Y1 cards distributed at start of Y1 solo prep. Y2 cards distributed at start of Y2 solo prep. Do not share contents with other participants unless the facilitator explicitly permits.

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Y1 Cards#

Card Y1-A: Frito-Lay Volume Read — Internal Disagreement#

Your FLNA commercial team and your CFO's office disagree, sharply, about what the 2024–2025 salty snacks volume softness actually is. The commercial team's read, backed by Nielsen and household-panel data, is that this is a cyclical consumer pullback driven by 2022–2023 pricing overshoot — volume will recover within 18 months with selective price investment and pack-size resets. The CFO's office, working with an outside team, has run a separate analysis pointing to GLP-1 households as a structural drag: prescription penetration in your top snacking demos has crossed a threshold where the per-household salty-snack purchase rate is measurably and persistently lower, and the curve looks linear, not transient. Both reads are internally credible. Laguarta has not adjudicated. Your Y1 decision implicitly picks a side: aggressive price investment (cyclical read) versus accelerated better-for-you and portion innovation (structural read).

What this signals: The single most important strategic question for PepsiCo this round is not visible from outside. The answer drives everything from capex allocation to M&A posture.

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Card Y1-B: Siete Integration — Quiet Outperformance#

The Siete Foods acquisition (closed October 2024, $1.2B) is tracking materially ahead of internal deal model in two specific ways your team has not yet briefed externally. First, distribution-velocity gains in Frito-Lay DSD accounts (where Siete was previously natural-channel-only) are running roughly double the deal-model assumption — the DSD network is a much sharper distribution multiplier for premium better-for-you snacks than the team underwrote. Second, the founding family and core innovation team have stayed engaged past the typical post-close attrition window; their pipeline of grain-free and Hispanic-targeted product extensions is deeper than the deal team realized. Internal conversation has started about whether Siete is a one-off or the prototype for a repeatable acquisition playbook: tuck-in premium-better-for-you brand plus DSD distribution scale-up. No external communication on this yet.

What this signals: You have a quietly validated M&A template. Decision: lean in (signal a programmatic acquisition push) or keep it quiet (preserve target valuations and optionality).

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Y2 Cards#

Card Y2-A: DSD Workforce — Organizing Pressure Building#

Your DSD network — around 32,000 drivers and route sales reps — has been the operating moat the investor narrative is built on, and the AI productivity layer (route optimization, demand sensing, in-store execution analytics) is now mature enough that the commercial team has modeled fewer drivers per delivered case across multiple regions. Your labor relations team has flagged that two Frito-Lay distribution centers in the Midwest are in early-stage organizing conversations with the Teamsters, specifically citing AI-driven route changes and productivity targets as the precipitating issue. A third site is being watched. None of this is public. The legal posture from your team is to slow visible AI-driven workforce changes in DSD until the organizing pressure settles; the commercial team wants to push harder on productivity now while the AI capability is fresh and competitive intelligence suggests Coca-Cola bottlers are doing the same.

What this signals: The DSD AI productivity case and the DSD labor-stability case are now in direct tension. Y2 decision posture sends a signal both internally and externally.

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Card Y2-B: Beverages Divestiture — Banker Pitch Received#

A senior team from a top-tier investment bank presented to you and the CFO three weeks ago an unsolicited strategic alternatives analysis for PBNA. The pitch frames a partial beverages divestiture (specifically the non-Gatorade, non-energy slow-growth portfolio — juice, tea, and select carbonated assets) as a $12–18B transaction that would unlock multiple expansion on the residual snacks-plus-premium-beverages company. The bank's read is that the dual-category discount is now wider than the dual-category synergy, and that activist interest will surface within 12–18 months if PepsiCo does not move first. Laguarta's stated view in the room was skeptical but not dismissive; he asked the team to keep working. No board conversation yet. The information is tightly held.

What this signals: A Strategic Swing on the beverage portfolio is on the table earlier than you would have expected. Y2 stance card commitment may foreclose or preserve this optionality.

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Document Version: Project Threshold V8.1 — PepsiCo Private Cards Last Updated: May 2026