A：The main topics addressed in the earnings call include the company's financial results, business plans, guidance, and outlook; the impact of various factors on reported results; and a discussion of non GAAP measures and potential risks and uncertainties that could affect forward looking statements.

A：The key executives participating in the call are Mr. Ravi Pam Noni, Senior Vice President of Investor Relations, Ramon Laguarta, Chairman and CEO, and Jamie Cofield, Executive Vice President and CFO.

A：The company's volume growth has been impacted by the pivot to smaller pack sizes and by category trends such as softening demand. In beverages, the company experienced growth after excluding the impact of divestitures, while in foods, the company's volume growth improved with a shift towards providing everyday low value or better value across all brands, leading to more balanced growth.

A：The factors contributing to the company's optimistic outlook include improvements in service levels, high field rates, better execution at the point of sale, innovation rollouts, and a balanced approach to growth involving both volume and price realization. The company is expecting to be flat in the current quarter in the food business and is optimistic about volume growth and continued net revenue acceleration in the short term.

A：The most impactful areas for accelerating revenue growth in 2026 include focusing on the company's ability to be 'brilliant at the basics', making significant interventions in major brands like Pepsi, Lipton, Tostitos, and Gatorade, and leveraging these interventions to drive growth across the business. The timeline for material progress is still to be determined but is expected to align with the company's growth algorithm throughout 2026.

A：The strategies for accelerating growth include focusing on platforms like away from home, which is growing very fast in the US and internationally. The retail business will also continue to be a focus area with an emphasis on the execution of existing products and innovation, particularly for away from home meals and an elevated experience. The company will continue to innovate in permissible snacks, with a strong portfolio in the US and 0 sugar across the well, which will be a focus of innovation to drive growth.

A：The company is approaching innovation in its products with a real sense of urgency, targeting new platforms to capture growing segments within its low growth categories. There is a particular focus on protein, including the relaunch of muscle milk and Starbucks protein, as well as the development of protein-related products like Doritos protein, Quaker protein, and new offerings from Propel for GLP 1 consumers. Additionally, the company is exploring the move to North Artificials across all its brands, introducing a new 'naked' platform with no colors or artificial ingredients.

A：Fiber is being emphasized as a key area for innovation, with the belief that it will be the next protein in terms of consumer demand and dietary benefits. The company is launching products with higher fiber content to meet this demand. Additionally, innovation is happening in new oils, with plans to introduce avocado versions and olive oil in some platforms, especially in the potato segment. This creates a strong innovation pipeline that the company believes will help capture pockets of growth within its categories and drive overall growth.

A：Recent acquisitions and divestitures are significantly reshaping the company's portfolio. They have led to the addition of strategic elements such as Poppy, which is already showing benefits in terms of physical availability. The company has seen growth with C and Saabre and plans to incorporate Alanni New into its portfolio later in the year. These moves are expected to contribute to the acceleration of the portfolio and support the company's positive growth trajectory in some segments.

A：The company is focusing on improving margins by attacking the cost structure with various tools across different businesses. This includes intentional and active actions around the supply chain and go-to-market fixed costs. Margins are expected to improve further, with particular focus on international growth continuing to drive margin expansion. Additionally, the company is optimizing its free delay business in North America and making internal reallocations to support new platforms and accelerate growth. Some costs are being shifted from fixed cost structures into areas that will directly support growth initiatives.

A：Interventions in Product Development and Manufacturing (PF&A) to right-size the cost structure include targeting manufacturing nodes that are no longer needed, typically older and less efficient ones. The company is also rationalizing its warehouse infrastructure, making automation decisions, and combining with the beverage business in some regions. The goal is to adjust the go-to-market size in response to a stabilizing labor market, removing excess labor and coverage that is no longer necessary.

A：PepsiCo is overhauling its service model through the global capability centers and has made changes in how the company services itself. As a result, productivity per FTE has improved to levels from a couple of years ago, and the company has reduced fixed costs by 6 to 7 months. The company plans to continue these interventions for the remainder of the year and will implement additional productivity initiatives to invest in affordability and support growth.

A：The benefits of the productivity actions include the carryover effect from incremental cost-reduction actions, which will provide significant benefits, particularly in the first half of the year. These actions have contributed to the positive performance and the company expects to continue to see their impact in the coming months.

A：PepsiCo is testing a potential cost-reduction and growth strategy in North America, focusing on integrating its beverages and snacks businesses in Texas. By operating from a single distribution point, the company is achieving benefits. Decisions on how to expand this model to the rest of the country will be based on market analysis, and the company will provide updates on these decisions as they are made.

A：The consumer market is stressed worldwide with consumers making choiceful decisions, especially in China and India. However, growth is being experienced in the Middle East, Eastern Europe is performing better than Western Europe, and there is a connection between the US and Mexico, influenced by US market conditions. Notably, Brazil is strong for PepsiCo, recording close to double-digit growth in September.

A：The momentum in the Pepsi brand is driven by factors such as the success of the Pepsi Zero Sugar relaunch, particularly in Europe, which has been positive for market share and the non-sugar segment growth. In the US, there is a focus on away-from-home and foodservice channels, and Pepsi is being culturally linked to occasions relevant to different types of consumers and foods. The brand is also investing more in marketing and is seeing growth in 0 sugar products and specific flavors like Cherry and B.

A：Pepsi plans to expand its brand through continued investment, focusing on growing segments such as 0 sugar and specific flavors. New platforms include a creamy extension of the Mountain Dew brand with Tia, adding a new dimension to the brand. These moves are expected to help reach more consumers and contribute to the brand's growth.

A：The strategies for the Gatorade relaunch include focusing on value, superior hydration, and communicating the message of faster, better, and longer hydration through different portfolio parts. The company is optimistic about these strategies contributing positively to their performance.

A：The sequential improvement in business performance is attributed to being 'brilliant at the basics', which includes enhancing core factors like service, price execution, and customer space. Better customer engagement and relations have been noticed as service levels improved following a system transition earlier in the year, and this is considered sustainable.

A：The impact of SKU rationalization is beneficial as it leads to operational efficiency, improved customer service, and the elimination of overlap with small volume items. This has resulted in better customer experiences and significant gains from enhanced efficiency and service levels.

A：The results of the price reinvestment in core brands at entry-level price points are not fully detailed, but it's mentioned that the investments are being made in the permissible subcategories and the mainstream, take-home portfolio. The focus is on refining the price pack architecture and using data to drive demand, with the priority being on ensuring sharp pricing for better market performance.

A：The rationale for choosing internal development over acquisition or partnership for protein beverages is to leverage existing platforms, which is a more cost-effective and strategic business decision. The development of products like Muscle Milk and Propel is aimed at meeting consumer needs for protein-rich, drinkable solutions without relying on scale players already present in the market. This allows for repositioning and expanding the brands into functional hydration and other related areas with innovative products.

A：To rightsize the cost structure and manage costs in the US, strategies include aggressive cost control, cost management in specific assets and brands, and looking at different cost structures that may be required for innovation, which may involve smaller runs, different supply chains, and a more complex approach.

A：The plan to transform the portfolio and drive growth involves focusing on consumer trends and spaces of the category that are growing, while also addressing the cost structure to ensure competitiveness and align with consumer value expectations.

A：Technology and AI will contribute to the company's future success by providing optionality, agility, and flexibility. Investments in technology have been made to enable the application of AI and intelligence to the company's infrastructure of data, which will help the company pivot quickly in response to market and consumer changes.

A：The CFO transition is due to Jamie's desire to retire after 33 years in the company. The new CFO is Steve, who was chosen for his experience, skills, proven record, and cultural fit with the company. He is expected to join in the next few weeks and continue the company's transformation.

A：While considering various ideas to create shareholder value, the company is open to the concept of franchising some operations, particularly on a regional basis in North America. However, the solution will not be uniform and will vary based on market position, partners, and other factors specific to each market.

A：The company is preparing for future demand by focusing on concentration in a few retailers or customers, anticipating a greater reliance on pick-up and delivery, and recognizing a shift in consumer behavior towards digital. Investments in technology are allowing the company to manage complexity and eliminate bottlenecks. The strategy is to optimize the full PepsiCo P&L and create a nuanced solution that differs by geographical market.

A：The company acknowledges that there is a complex topic regarding consumer preferences and behavior towards healthier eating, which is influenced by both consumer shifts and value-seeking. In North America, there is an ongoing debate about these preferences, and the company is also considering how international consumers are evolving in their preferences, mirroring or diverging from the North American business.

A：Consumers are moving to digital purchasing in a very structural way, which will change the dynamics of the industry in terms of what they buy, how they buy, and what they expect in terms of delivery methods.

A：Consumers are becoming more informed about the ingredients in food and drinks, making choices based on clean labels and ingredients rather than just taste, which affects brands and necessitates relaunches to consider these preferences.

A：Consumers, particularly low-income and middle-income households with stretched fixed cost of living, are facing the need for affordability, value, price points, and cost consciousness, which is expected to influence purchasing behavior for the foreseeable future.

A：PepsiCo has engaged constructively with the activist investor, finding alignment on the need to improve the company's valuation. Most of the investor's suggestions are included in PepsiCo's strategy 2030, and both parties are committed to creating shareholder value. Collaborative discussions are expected to further integrate perspectives and drive positive change for PepsiCo.