How PepsiCo Grew From a 1965 Merger Into a Global Food and Beverage Company

A Quick Look at the History of PepsiCo

Two Business Histories Meet in 1965

PepsiCo’s corporate history starts in 1965, but the Pepsi-Cola lineage is much older. Caleb Bradham adopted the Pepsi-Cola name in New Bern, North Carolina, in 1898 and formed an early Pepsi-Cola company in the years that followed. That business later failed after a period that included severe sugar-price pressures following World War I.

The Pepsi-Cola name survived through later corporate entities rather than one uninterrupted company. A Delaware court history records that a new Pepsi-Cola Company was organized in 1931 after the formula and trademark were acquired from the bankruptcy trustee of National Pepsi-Cola Company.

That distinction matters because Pepsi-Cola’s brand history predates PepsiCo. The modern PepsiCo story begins when Pepsi-Cola Company and Frito-Lay, Inc. merged in 1965. Donald M. Kendall of Pepsi-Cola and Herman W. Lay of Frito-Lay were the leaders associated with the combination.

The merger joined two different consumer businesses—beverages and snack foods—inside one company. That pairing became the foundation PepsiCo would repeatedly expand, reorganize, and refocus over the decades that followed.

Restaurants Expand the Company, Then Leave It

PepsiCo moved well beyond packaged foods and beverages beginning in the late 1970s. It acquired Pizza Hut in 1977, Taco Bell in 1978, and KFC in 1986, building a large restaurant portfolio alongside its existing businesses.

By 1997, management had decided to separate those operations. Chairman and CEO Roger Enrico summarized the objective this way: “Our goal in taking these steps is to dramatically sharpen PepsiCo’s focus.”

The spin-off was completed on October 6, 1997, through TRICON Global Restaurants, which later became Yum! Brands. KFC, Pizza Hut, and Taco Bell were no longer PepsiCo businesses after the separation.

The move remains one of the clearest strategic reversals in PepsiCo’s history. The company had spent years building the restaurant portfolio, then shifted back toward packaged foods and beverages when management concluded the businesses had different operating dynamics.

That refocusing continued in 1998 when PepsiCo acquired Tropicana Products from Seagram for $3.3 billion in cash. The deal strengthened the beverage side of the portfolio, although PepsiCo would later change its ownership of the juice business as its priorities shifted again.

Quaker, Gatorade, and a New Bottling Model

PepsiCo completed its merger with The Quaker Oats Company on August 2, 2001. Quaker became a wholly owned PepsiCo subsidiary, and the transaction brought Gatorade into the company.

The deal broadened the portfolio beyond carbonated soft drinks and salty snacks. Quaker added grain-based foods, while Gatorade added a sports-hydration business that remained a major part of PepsiCo years later.

During Indra Nooyi’s leadership, PepsiCo also articulated a broader management philosophy. In a 2007 speech, Nooyi described “Performance with Purpose” as an approach that linked financial performance with changes in the product portfolio, operations, people, and environmental practices. It was PepsiCo management’s framework for the company’s direction, not an independent measure of results.

Distribution became another major area of change. In 2009, PepsiCo reached agreements to acquire the shares it did not already own in Pepsi Bottling Group and PepsiAmericas. Nooyi said changing conditions in the North American beverage business required a more flexible, efficient, and competitive system.

The transactions were completed on February 26, 2010, bringing major anchor bottling operations under PepsiCo control. The episode illustrates a recurring pattern in the company’s history: operating structures that once fit the business have sometimes been reconsidered as market conditions changed.

Portfolio Change Accelerates Under Ramon Laguarta

Ramon Laguarta became CEO in 2018 and later became chairman. That same year, PepsiCo completed its acquisition of SodaStream International. PepsiCo described SodaStream as an at-home beverage platform that could support a broader “beyond the bottle” strategy.

In September 2021, PepsiCo introduced PepsiCo Positive, or pep+, as an end-to-end transformation organized around Positive Agriculture, Positive Value Chain, and Positive Choices. The framework represented management’s stated direction for changing both the portfolio and how the company operated.

PepsiCo was also willing to reduce control over businesses it had once acquired. In 2022, it transferred Tropicana, Naked, and other select juice businesses to a joint venture controlled by PAI Partners. PepsiCo retained a 39% noncontrolling interest and specified U.S. distribution rights.

The Tropicana story shows how strategic fit can change over time. PepsiCo bought the business in 1998 during a renewed focus on packaged foods and beverages. More than two decades later, it chose a structure in which it no longer controlled the transferred juice businesses.

The Quaker Recall and Pressure in North America

A major operational setback emerged at the end of 2023. The Quaker Oats Company recalled bars, cereals, and other products because of potential Salmonella contamination. In 2024, the U.S. Food and Drug Administration documented inspection findings at the Danville, Illinois, facility connected with the recall. PepsiCo later reported material recall-related charges and sales effects.

By 2025, PepsiCo was also reporting softer volumes in its core North American businesses. Its 2025 annual report showed unit volume declines of 2% in PepsiCo Foods North America and 3% in PepsiCo Beverages North America. Net revenue for the year was $93.925 billion, while operating profit fell 11% to $11.498 billion. Rockstar-related impairment charges were among the factors affecting the beverage business.

At the same time, PepsiCo continued adding brands. It completed its $1.2 billion acquisition of Siete Foods in January 2025 and acquired prebiotic soda brand poppi in May. Those transactions show that the company was still investing in new categories even while addressing pressure in existing North American operations.

The 2025–2026 Operating Reset

On December 8, 2025, PepsiCo announced a new set of commercial and financial priorities. The company said the plan incorporated constructive engagement with Elliott Investment Management and emphasized affordability, innovation, cost reduction, portfolio simplification, manufacturing actions, and a review of North America’s supply-chain and go-to-market structure.

Later that month, PepsiCo changed its North American leadership structure. Ram Krishnan became CEO of PepsiCo North America, with an agenda to integrate Foods and Beverages operations where management believed doing so would create value. PepsiCo’s financial reporting continued to distinguish its North American food and beverage segments.

Second-quarter 2026 results showed renewed top-line growth. PepsiCo reported net revenue growth of 6.4% and organic revenue growth of 2.4%.

Those results were a current checkpoint rather than a final judgment on the reset. At the September 16, 2026 research cutoff, the broader North American operating-model changes were still in progress.

Where PepsiCo Stands in 2026

PepsiCo remained a global beverage and convenient-food company at the research cutoff. Its 2025 Form 10-K described six reportable segments: PepsiCo Foods North America; PepsiCo Beverages North America; International Beverages Franchise; Europe, Middle East and Africa; Latin America Foods; and Asia Pacific Foods.

Ramon Laguarta remained chairman and CEO. The portfolio included long-established brands such as Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, and Quaker, alongside SodaStream and newer additions including Siete Foods and poppi.

A useful way to read PepsiCo’s history is as repeated recombination around beverages and convenient foods. The company has expanded beyond that core, separated businesses, changed distribution structures, added new categories, and later reconsidered earlier portfolio choices.

That process was still underway in 2026. PepsiCo’s current operating reset was another chapter in a history shaped less by one permanent structure than by repeated changes in what the company owns and how it operates.

Timeline

This timeline highlights the major milestones that changed PepsiCo’s structure, portfolio, leadership, or operating model.

1898

Caleb Bradham adopted the Pepsi-Cola name. This belongs to Pepsi-Cola predecessor history, not the founding of PepsiCo.

1931

A new Pepsi-Cola Company was organized in Delaware after the formula and trademark were acquired from the bankruptcy trustee of National Pepsi-Cola Company.

1965

Pepsi-Cola Company and Frito-Lay, Inc. merged to form PepsiCo.

1977–1986

PepsiCo expanded into restaurants by acquiring Pizza Hut, Taco Bell, and KFC.

October 6, 1997

PepsiCo completed the spin-off of its restaurant businesses through TRICON Global Restaurants, later known as Yum! Brands.

1998

PepsiCo acquired Tropicana Products from Seagram for $3.3 billion in cash.

August 2, 2001

PepsiCo completed its merger with The Quaker Oats Company, bringing Quaker and Gatorade into the company.

2009–2010

PepsiCo agreed to acquire the shares it did not already own in Pepsi Bottling Group and PepsiAmericas, then completed the transactions on February 26, 2010.

2018

Ramon Laguarta became CEO, and PepsiCo completed its acquisition of SodaStream International.

September 15, 2021

PepsiCo introduced pep+, its company-wide transformation framework.

2022

PepsiCo transferred Tropicana, Naked, and select juice businesses to a PAI-controlled joint venture while retaining a 39% noncontrolling interest and specified U.S. distribution rights.

December 2023–2024

The Quaker Oats Company carried out a recall involving products with potential Salmonella contamination, followed by FDA inspection findings and material business effects.

January–May 2025

PepsiCo completed the acquisitions of Siete Foods and poppi.

December 2025

PepsiCo announced 2026 priorities covering affordability, cost reduction, portfolio simplification, and a North America supply-chain and go-to-market review, then changed its North American leadership structure.

July 9, 2026

PepsiCo reported second-quarter net revenue growth of 6.4% and organic revenue growth of 2.4% while the broader operating reset remained in progress.

FAQs

Question: Is PepsiCo the same company as the original Pepsi-Cola business?

Answer: Not exactly. Pepsi-Cola’s brand and corporate history predates PepsiCo and includes bankruptcy and reorganization. The modern PepsiCo was formed in 1965 through the merger of Pepsi-Cola Company and Frito-Lay, Inc.

Question: Does PepsiCo still own Tropicana?

Answer: PepsiCo no longer controls the Tropicana, Naked, and other select juice businesses transferred in the 2022 transaction. It retained a 39% noncontrolling interest in the joint venture and specified U.S. distribution rights.

Interviews & Firsthand Resources

Indra Nooyi on Performance with Purpose

Indra Nooyi’s 2007 “Performance with Purpose” speech provides a firsthand explanation of the philosophy she used to connect PepsiCo’s financial goals with changes in portfolio, operations, people, and sustainability. It is useful for understanding how management described the company’s direction during the Nooyi era.

Read the Performance with Purpose speech

Sources

• PepsiCo: Shareholders Services, Bottler Merger Agreements, SodaStream Acquisition, pep+ Transformation Announcement, Siete Foods Acquisition, poppi Acquisition, 2026 Priorities, North America Organizational Changes, Ramon Laguarta Leadership Profile
• U.S. Securities and Exchange Commission / PepsiCo: 2001 Form 10-K, 1998 Tropicana Acquisition Disclosure, 2010 Bottler Merger Completion, 2022 Juice Transaction Filing, 2025 Form 10-K, Second-Quarter 2026 Results
• TRICON Global Restaurants / SEC: Form 10-K Historical Development
• North Carolina Department of Natural and Cultural Resources: Caleb Bradham 1867–1934
• Delaware Supreme Court / Justia: Guth v. Loft, Inc.
• The Washington Post: PepsiCo to Spin Off Restaurant Division
• U.S. Food and Drug Administration: PepsiCo Warning Letter
• Indra Nooyi: Performance with Purpose Speech