Avoidance of negativity or silent support of the aggressor? The world-famous manufacturer of drinks and snacks PepsiCo found itself in another scandal due to the promulgation of new “standards” of the company. In particular, in brand advertising it is prohibited to remember the war with Russia and the Ukrainian Armed Forces.
What's wrong with Pepsi's positioning and how are the company's actions playing into the hands of Russians?
“NO”: mentions of war, hostilities, aggression, the military (from the brand), the Armed Forces of Ukraine. YES: support for Ukraine and the army. YES: Negative connotation that creates a feeling of “danger,” says the “Pepsi Limitations” section.
Why are these PepsiCo “standards” causing such a stir? StopCor analyzed how the company performed during a full-scale war.
On October 17, a message appeared on PepsiCo’s Instagram page that “PepsiCo volunteers distributed food packages to 1,200 families in the city of Borodyanka whose homes were destroyed.” The report does not specify who brutally destroyed the homes of these people.
Perhaps because PepsiCo's net profit in Russia last year grew by 333% to $525 million, and the company paid about $115 million in taxes to the Kremlin? Considering such contributions as support for the economy of the aggressor state, the National Agency for the Prevention of Corruption (NACP) of Ukraine in September included PepsiCo in the list of international war sponsors.
Note that PepsiCo produces soft drinks, juices, chips, snacks, dairy products and other food products under the main brands Chester's, Chipsy, Lay's, Mirinda, Pasta Roni, Pepsi, Propel, Sandora, 7Up, Simba, Snack a Jacks, Tropicana.
According to NAPC, the company has 19 factories, about 20,000 employees, 40,000 agricultural workers and 600 open positions in Russia.
The company announced it would cease promotional activities and production of some beverages in Russia in March 2022, while allowing the sale of other products such as infant formula and baby food to, in PepsiCo's words, "remain true to the humanitarian aspect of its business." But in fact, the company continues to produce and distribute chips, snacks and soft drinks. PepsiCo's revenue in Russia rose 16% and profits quadrupled, according to Bloomberg, and the soda maker said operations in Russia accounted for 5% of consolidated net income for 2022, up from 4% a year earlier.
Now the iconic Pepsi Cola is sold under the Evervess-Cola brand, although regular Pepsi Cola can still be easily purchased in Russian supermarkets through so-called parallel imports, when goods are imported without the manufacturer's permission.
In early September last year, PepsiCo came under fire for its Russian business when the company's products were rejected by the Finnish parliament and Scandinavian airline operator SAS, and on September 21, ironically, a Russian missile damaged a PepsiCo plant near the Ukrainian capital of Kyiv.
“We call on PepsiCo to leave Russia as quickly as possible, and the US government to issue a business advisory warning American businesses about the increasing legal, reputational and financial risks of doing business under military control in the Russian Federation,” StopCor emphasizes.
Let us recall that after the start of a full-scale invasion, the famous musician Ivan Dorn, who had previously performed in the Russian Federation, refused concerts in the aggressor country and clearly spoke out in support of Ukraine. However, less than two years have passed, and the singer is already planning to release Russian-language tracks.
