PepsiCo To Share Customer Data With Retailers Amid Layoffs And Plant Closures

Everyone has heard of PepsiCo, right? Think of its product line: Gatorade, Aquafina, Mountain Dew, Ocean Spray Cheetos, Doritos and many, many others. The reason it has been around for 100+ years is that the retail giant adapts to the ever-changing market conditions.

PepsiCo is currently doing the same with significant changes aimed at streamlining its operations and supply chain efficiency while aligning with the shifting market demands.

In the same move, PepsiCo recently announced the closure of four bottling facilities and a major workforce reduction. Yet, it is doing much more, by increasing collaboration with retailers to enhance its sales forecasting and supply chain management.

So, what exactly is PepsiCo planning and how will these pivots impact the retail behemoth? Read on!

What Is PepsiCo Doing?

PepsiCo executives confirmed that it will close 4 U.S. bottling plants during its multi-year restructuring plan. These closures will affect around 400 employees, who will be laid off. The affected workers will still get paid and receive benefits for 60 days, the company said.

The four sites in question are in Atlanta, Cincinnati, Chicago, and Harrisburg, Pennsylvania. The only plant that will be completely shut down is the one in Chicago, while the other three will be involved in sales, delivery and storage.

This move is part of PepsiCo’s ongoing efforts to enhance efficiency, cut costs and simplify its business model amidst declining sales. After all, its net income fell by 5% to $2.9 billion for the third quarter, partly because consumer demand in the U.S. and other key markets fell significantly. Moreover, in the second and third quarters of 2024, PepsiCo's North American drink sales dropped by 3%.

What Caused PepsiCo To Take These Measures?

PepsiCo changed its sales forecast for the fiscal year earlier this month, with the company seeing growth in the low single digits. This change comes at a time when inflation and higher loan costs are still making it harder for people to spend money. Hence, many consumers are choosing cheaper snacks and drinks over PepsiCo’s branded ones.

To deal with these challenges, PepsiCo has been forced to make its operations more efficient and productive. This has led to changes in the sizes of its packages, more marketing for famous its food brands and finally, the closure of bottling plants.

Yet, PepsiCo has also pivoted to a new strategy. What’s it all about?

How Is PepsiCo Working With Retailers On Data?

Along with the steps it is taking to cut costs, PepsiCo is also working to improve its forecasting ability by sharing and accessing data with major retailers. Angelika Kipor, PepsiCo's Senior Vice President of Strategy and Transformation, recently said that the company is sharing more data with big stores to better predict demand and make the supply chain work better.

For example, PepsiCo uses sales data from retailers to understand how well a product is doing, which helps them decide what to sell next. This partnership is not only helping PepsiCo predict customer behavior and trends better but it also striking more deep relationships with key retail partners.

PepsiCo is also planning to use AI to quickly process large amounts of data so that it can make better choices for both the company and its retail customers.

What Does This Restructuring Means For PepsiCo?

The decision to close bottling plants and cut jobs is part of PepsiCo’s broader strategy to position itself for long-term sustainability. While job cuts and plant closures may initially seem like setbacks, PepsiCo is aiming to reduce operational costs and make its supply chain more agile in response to the ever-changing market conditions.

While PepsiCo, like many businesses that make everyday items, is under pressure from rising costs and customers who are more price conscious, PepsiCo’s restructuring is aimed at reducing its operational overloads. In addition to this, its retail data sharing strategy will enable better product demand forecasting and supply chain visibility.

Do you think these strategic moves by PepsiCo will help strengthen its place in the global retail market?

Let us know your thoughts in the comments below!