TO OUR SHAREHOLDERS,

I am pleased to inform you that 2023 was another good

year for PepsiCo. We exceeded many of our performance

goals, innovated across our portfolio, and continued to

transform the business and build new capabilities. We did

this while continuing to invest in communities where we

live and work, create industry-leading partnerships, and

nurture our talent and workplace culture. More than ever,

we put PepsiCo Positive (pep+) at the center of all that

we do, transforming the business from end-to-end to

drive sustainable performance and value that positively

impacts the planet and our communities.

Our 2023 results show that our Winning with pep+

strategy is working, and it is the key to building an even

Faster, Stronger, and Better PepsiCo.

Becoming Even Faster, Stronger, and Better

Our financial performance in 2023 was highlighted

by robust 9.5% organic revenue growth, bringing our

three-year compound annual organic revenue growth

rate to 11%, and 14% growth in core constant currency

earnings per share (EPS). We showed very good progress

across geographies, with organic revenue up 8% in North

America, 12% in our International business, 10% in our

Global Convenient Foods business, and 8% in our Global

Beverages business.i

Our results reflect more than $1 billion in productivity

savings, while minimizing waste across our value chain.

From a marketplace perspective, in 2023 we held or

gained share in more than half our key global beverage

and convenient foods markets. We also received the

top spot for manufacturing in the Kantar PoweRanking

survey for the eighth consecutive year, a testament to

the collaborative relationships we maintain with our

customers and partners.

This strong performance enabled us to increase our

annualized dividend by 7%, effective with the dividend

expected to be paid in June 2024. This will represent

PepsiCo's 52nd consecutive annualized dividend per

share increase.

Our success in 2023 was powered by the critical

investments we're making to accelerate growth and build

a company that thrives in the future, such as:

• Advancing major transformation initiatives to

increase our productivity, elevate our focus on cost

control, and speed up the implementation of our

digital strategy;

• Showing progress with the automation of our data

and digital infrastructure and expanding critical

digital programs in more markets to enable faster

decision making;

• Launching our Powering Positive Growth marketing

transformation, leveraging the scale and influence of

our global brands;

• Driving scope and presence in key consumer

channels, like Away from Home and e-commerce;

and

• Laying the groundwork for the future of the business

and our industry, becoming the first consumer

packaged goods company to collaborate with the

Stanford Institute for Human-Centered Artificial

Intelligence to shape responsible and ethical Al

standards around consumer goods and retail.

We're also continuing to transform our portfolio with new

innovations and more positive choices for consumers.

These include:

• Launching Starry, our new lemon-lime soda, as well

as mini-snacks canisters and new Beyond the Bottle

solutions with Gatorade;

• Introducing our new Pepsi visual identity;

• Refreshing and extending our lineup of bold flavor

profiles across large brands with Flamin' Hot

and Doritos;

• Reducing sodium in some of our biggest brands like

Lay's Classic, Doritos Nacho Cheese, and Cheetos

Crunchy in the U.S.; Sabritas Adobadas in Mexico;

and Walkers in the U.K.; and

• Reducing added sugars and expanding our

zero sugar offerings across our beverage

portfolio, with Pepsi Zero Sugar now available in

121 international markets.

People and Planet at the Center

As we work to grow our business and deliver best-in-class

performance, we continue to make sure we are a company

that has a positive impact beyond our financials.

In 2023, pep+ remained our North Star, and we made

progress across its three core pillars: Positive Agriculture,

Positive Value Chain, and Positive Choices.

Positive Agriculture:

• Forging industry-leading partnerships to advance

our goal of adopting regenerative agriculture

practices across seven million acres worldwide,

roughly the size of our agricultural footprint. This

includes a collaboration with Walmart to cover

more than two million acres of farmland in the U.S.

and Canada, as well as strategic partnerships with

three of the most well-respected U.S. farmer-facing

organizations— Practical Farmers of Iowa, the Soil and

Water Outcomes Fund, and the Illinois Corn Growers

Association; and

• Announcing the third year of our Positive Agriculture

Outcomes Accelerator with investments in

projects across nine countries that support farmer

livelihoods, help scale sustainable innovations, and

accelerate the spread of regenerative agriculture.

Positive Value Chain:

• Introducing more sustainable packaging solutions,

with 31 markets having at least one product

packaged with 100% rPET;

• Continuing to scale new business models that

require little or no single-use packaging, allowing

users to personalize their choices in reusable

containers at home or on the go through

SodaStream and expanding Beyond the Bottle

at Gatorade and Propel with enhancers, tablets,

and powders;

• Opening an industry-leading Greenhouse Learning

Center for the Frito-Lay and Quaker Research

and Development teams to study compostable

packaging, aimed at speeding up the rate of

innovation for packaging solutions;

• Launching pep+ Partners for Tomorrow to help our

partners achieve their own sustainability goals,

bringing PepsiCo's comprehensive customer

sustainability offerings under a single umbrella;

• Advancing our Diversity, Equity, and Inclusion

agenda around our people to reflect the

communities where we operate, including reaching

45% women in management roles globally, while

increasing U.S. Black and Hispanic representation at

the manager level to 9.2% and 10.3%, respectively.

We also continued to strengthen our ability to hire,

develop, and retain the best and brightest talent,

supporting our business partners, while helping to

build an inclusive supply chain and create economic

opportunity in the communities we serve;

• Continuing to focus on investing in our

employees— both frontline and professional —and

providing more opportunities for career

advancement; and

• Creating smiles in our communities through the

PepsiCo Foundation, investing $47.4 million in more

than 40 countries to help unlock access to nutritious

food, safe water, and economic opportunity.

Positive Choices:

• Continuing to transform our portfolio with new goals

to further reduce sodium and deliver 145 billion

portions of diverse ingredients such as legumes,

whole grains, plant-based proteins, fruits, vegetables,

and nuts and seeds annually by 2030; and

• Expanding the variety of positive choice offerings

with our air popped, baked, reduced fat, lightly salted,

and Simply branded products, as well as smaller

pack sizes.

Performing to Our Potential

From our investments in long-term growth to our actions

to build a more resilient and sustainable world, we are

proud of our progress in 2023—a challenging year,

defined in many ways by economic instability, geopolitical

tensions, high inflation, and a tight labor market. We have

proven we can navigate these challenges well. The next

few years will no doubt bring new and different challenges,

and the landscape will continue to evolve. To remain an

industry leader, we must continue to evolve too, seizing

new opportunities.

We're coming from a position of strength: we've spent

a lot of time and resources building up our technology,

our world class talent, our brands, and our capabilities.

Now, we need to do the hard work of building on some

very strong years to perform to our full potential in 2024

and beyond.

To achieve profitable growth in the years ahead, we

will work to accelerate our growth in North America

($55 billion in 2023 reported net revenue) by capturing

new consumer needs and occasions, and we'll continue

to scale our International business ($36 billion in 2023

reported net revenue) by broadening our presence

and availability in key markets where there are many

opportunities to develop our categories.

Central to our growth strategy will be building up core

capabilities, including:

• Advancing consumer-centric innovation by offering

more positive choices, delivering new flavors and

packaging options, building new ways for consumers

to connect with our brands across different

occasions, providing opportunities to customize and

personalize products, and extending our brands into

new channels;

• Digitalizing our company by leveraging cutting-

edge technologies, such as artificial intelligence

and machine learning, to gain more consumer

insights and analytics, develop faster and more

agile forecasting, and deliver better execution and

performance from the plant to the shelf; and

• Accelerating and expanding our productivity, with

more automation at our plants and warehouses

to empower frontline decision-making, greater

optimization across our transportation and fleet

network, and greater focus on cost management and

eliminating waste.

I am more confident than ever that our Winning with

pep+ strategy is the right one to achieve these goals

and make us an even Faster, even Stronger, and even

Better company.

We have the right team to get us there. Our people are the

key to our success, and I am proud of our leaders and our

associates who continue to deliver exceptional results in a

dynamic and complex operating environment.

I'd like to also extend my gratitude to our partners and

suppliers around the world for showing us what best-

in-class collaboration looks like. With their continued

support—and the support of all our stakeholders—we

will be well-positioned to achieve our goals for 2024 and

move closer to performing to our full potential.

Thank you for your continued support and for trusting us

with your investment.

Ramon L Laguarta

PepsiCo Chairman of the

Board of Directors and

Chief Executive Officer