PepsiCo Partners with AWS for AI and Supply Chain Transformation

PepsiCo, Inc. (PEP) is set for growth, driven by its strong core categories, diverse portfolio, and enhanced digital capabilities. The company’s recent innovations are on a solid trajectory.

PepsiCo’s Strategic Move with AWS

Recently, PepsiCo announced a multi-year agreement with Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (AMZN). This partnership establishes AWS as PepsiCo’s strategic cloud provider, focusing on AI, supply chain management, and improving customer experiences.

With AWS’s infrastructure, PepsiCo aims for faster AI innovations and enhanced supply chain dynamics to deliver more personalized customer interactions. This alliance encompasses all global operations and lines of business for PepsiCo. AWS will collaborate with PepsiCo on cloud migration, IT modernization, and generative AI initiatives, enhancing global functions and consumer engagement.

PepsiCo has already started migrating its applications and workloads to AWS. As part of its cloud-first strategy, this initiative will enable the company to rapidly develop and implement new technologies for both customers and employees. AWS is also enhancing PepGenX, PepsiCo’s internal generative AI platform, by integrating it with Amazon Bedrock.

This integration will provide PepsiCo’s developers with access to various foundational models and capabilities in Agentic AI, fostering the development of strategic generative AI applications using AWS. Both companies are positioned to offer end-to-end digital supply chain capabilities, enhancing operational efficiencies through predictive maintenance in manufacturing and logistics.

By utilizing AWS, PepsiCo can gain real-time insights into advertising and audience segmentation, ultimately improving their marketing effectiveness. This collaboration aims to advance the company’s comprehensive digital transformation.

Overview of PepsiCo’s Growth Strategies

PepsiCo is actively evolving its brand portfolio by emphasizing meaningful innovations and strategic acquisitions. The company is also focusing on holistic cost-management initiatives to improve productivity. This approach will help mitigate cost inflation and support investments in brand development and expansion.

Additionally, PepsiCo plans to achieve productivity goals through savings generated from restructuring efforts designed to streamline and automate supply chain processes. The company continues to reinforce its international presence and has shown resilience in its category strengths and digital capabilities.

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Despite these advancements, PepsiCo’s shares have declined by 18.3% over the past six months, contrasting with the industry’s growth of 3.7%. Primary factors include reduced consumer demand in North America, product recalls in the Quaker Foods segment, and ongoing geopolitical challenges. Additionally, unfavorable currency exchange rates continue to exert pressure.

Potential Investment Alternatives

United Natural Foods (UNFI), a distributor of natural and organic foods in the U.S., holds a Zacks Rank of #2 (Buy). The company reported an impressive trailing four-quarter earnings surprise of 408.7% on average.

The Zacks Consensus for UNFI’s current financial-year sales and earnings per share (EPS) suggests a growth of 1.9% and 485.7%, respectively, compared to last year.

Nomad Foods (NOMD), a manufacturer of frozen foods, also carries a Zacks Rank of #2. This company achieved a trailing four-quarter earnings surprise of 5% on average, with the current financial-year EPS projection reflecting an 11.4% growth compared to last year’s figure.

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Amazon.com, Inc. (AMZN): Free Stock Analysis report available.

PepsiCo, Inc. (PEP): Free Stock Analysis report available.

United Natural Foods, Inc. (UNFI): Free Stock Analysis report available.

Nomad Foods Limited (NOMD): Free Stock Analysis report available.

The views expressed herein are the opinions of the author and do not necessarily reflect those of Nasdaq, Inc.