This meeting is a Q&A livestream for PepsiCo's financial report for the second quarter of 2020, hosted by Senior Vice President of Investor Relations, Robbi Pamunky. Attendees include PepsiCo's Chairman and CEO, as well as its Executive Vice President and CFO. The meeting emphasized potential risks and uncertainties, mentioned the use of non-GAAP financial metrics, and requested participants to limit the number of questions.

At the financial conference, the host detailed the questioning process, which requires participants to press the star key followed by 100 to ask a question. If the question has been answered and they wish to exit the queue, they need to press the star key followed by 1 again. Soon after, the conference welcomed the first questioner, a representative from Goldman Sachs, who was ready to ask their question.

In the discussion, PepsiCo detailed its strategies for accelerating productivity initiatives and optimizing its asset base, aiming to improve cost structure through investments in technology and AI to achieve long-term growth. Especially in the North American market, the company seeks efficiency improvements and cost savings through integrating two major business units while maintaining growth potential. Additionally, the company plans to address the adverse impact of fixed costs by closing factories, adjusting production lines, and optimizing human resources, while further enhancing productivity through measures such as utilizing ERP systems and procurement savings.

In the dialogue, several key initiatives for the North American food and beverage business were discussed, including stabilizing food categories, enhancing competitiveness of subcategories, product innovation and repositioning, as well as strengthening sports marketing and the functional water product line. Special emphasis was placed on gradually improving market share and sales growth through these strategies, with the goal of returning to a low-speed growth trajectory in the short term. Additionally, mention was made of the relaunch of the Lay's brand and sugar-free Coke, as well as the focus on sports drinks and the Propel brand, to drive overall business continuous improvement and market performance.

The discussion focused on the development potential of the company's beverage and food business in the consumer out-of-home consumption market, especially the high single-digit growth performance in this quarter, and whether this growth is expected to continue for the rest of the year and in the long term. The company emphasized that as consumers shift their consumption patterns to out-of-home consumption, this creates more growth opportunities for the company. They are surpassing the strategy of just providing physical availability of products by increasing product innovation and solutions, such as mini meals and ready-to-eat products. Additionally, the company noted that compared to retail, the out-of-home consumption market is a higher-profit business, and is an area where both the beverage and snack businesses can increase their profit margins, therefore planning to invest more resources and innovation in the future to seize this growth opportunity.

The discussion focused on the expected acceleration of the company's annual earnings, especially the growth in the second half of the year compared to the first half, as well as discussions on the visibility and assumptions of this growth. At the same time, the company's long-term investment strategy in business was also explored, including technology investment, value investment, and investments in advertising and marketing to support long-term organic sales growth.

During the discussion, the company's senior management detailed their market strategy and success in the healthy snacks (especially sugar-free and functional beverages as well as permissible snacks) sector. They mentioned several successful brands and product lines, including the multi-grain-based Sunchild, the baked instead of fried Pop Corners, and the recently added brand CTA. At the same time, they also discussed how to increase consumer trial rates by increasing the physical availability of products in the market and adjusting price points, as well as thoughts on brand innovation and preventing brand dilution.

The company plans to relaunch the Lace and Tostitos brands, emphasizing their real food ingredients and eliminating artificial additives. They will also innovate in the functional food category, such as adding protein to brands like popcorn and Quaker Snacks. In addition, the company will heavily promote in the beverage sector, planning to launch new products in the liquid protein supplement market that are additive-free and have a great taste to cater to consumer trends.

The conversation discussed the company's success stories and growth strategies in the international market, with particular mention of performance in Latin America, parts of Europe, the Middle East, China and the Indian market. The company emphasized its investments in the food and beverage categories, as well as its continuous focus on long-term market growth. Furthermore, it was pointed out that international business is now making a positive contribution to PepsiCo's profitability and has become an important investment opportunity for the company.

During the discussion, the management expressed confidence in the current business growth of the company, especially the sustained growth in international markets and the gradual improvement in North American business. They emphasized the enhancement of competitiveness in multiple niche markets, as well as the refinement of investment management and increased productivity to support value and product innovation. They also mentioned that the away from home business is bringing in good returns.

The discussion primarily revolves around consumers' demand for healthy snacks, and how the company meets this demand through innovation and diversification of product forms (such as smaller packaging, low-sugar options, etc.). Additionally, it mentions the company's optimistic attitude towards long-term growth opportunities in the health food and beverage sector, as well as how to adapt to consumers' increasingly busy lifestyles by providing more healthy, convenient, and reasonably priced solutions.

The conversation discussed PepsiCo potentially reaching the low end of its long-term top line algorithm in the coming quarters, thanks to the sustained strong performance of its international businesses and the gradual improvement of its North American business. It was noted in particular that, despite facing some sales challenges in the third quarter due to the high comparison base of promotional activities, the overall trend is expected to be positive.

Discussed the rapid growth trend of protein solutions in the food and beverage industry, and how companies are meeting consumer demands by offering big brand solutions. At the same time, multiple dimensions were considered in value proposition, including affordability, availability, and diversity, emphasizing efforts to accurately position value and affordability through data analysis. New platforms and product details will be announced in the coming months to further meet the market and consumer demand for protein diets.

The company discussed the success of its international beverage business, particularly focusing on growth strategies for sugar-free beverages, energy drinks, and hydration products, emphasizing the market performance of brands like Diet Coke and Gatorade. At the same time, the company plans to integrate its two major operating businesses in North America, optimize the value chain to reduce costs and enhance business performance.

The discussion focused on how the beverage industry is responding to the changing demands of global consumers for healthier, more natural ingredients, particularly in the progress of removing artificial flavors and colors, as well as the differences in pace between North American and international businesses in this evolving process.

PepsiCo continues to be optimistic about the North American beverage and energy drink market, seeing it as a long-term growth area. The company is involved in the market in various ways, including partnerships with Celsius, increasing market value through distributing brands, and a joint venture with Starbucks to provide diverse energy solutions. PepsiCo also emphasizes the importance of its strong distribution infrastructure in creating value, and states that it will continue to invest and innovate to meet the evolving needs of consumers and drive future growth.