PepsiCo: From Pepsi and Gatorade to Doritos and Lay's

PepsiCo has expanded from a single-brand soda company into a global leader in food, snacks, and beverages. With a portfolio of iconic brands such as Pepsi, Lay's, Doritos, Quaker Oats, Mountain Dew, and Gatorade, its products are staples on grocery store shelves worldwide. Join us as we explore the history of Pepsi, the transformation into PepsiCo, and the expansion of its vast brand portfolio over the decades.

• Brad's Drink: PepsiCo's story began in the 1890s with "Brad's Drink," created by pharmacist Caleb Bradham.

• Portfolio of brands: PepsiCo owns major brands like Pepsi, Mountain Dew, Gatorade, Lay's, Doritos, Cheetos, and Quaker Oats – along with over 200 others.

• Dividend King: PepsiCo has increased its annual dividend for 53 consecutive years, earning the company a spot among the elite “Dividend Kings”.

PepsiCo traces its origins back to the 1890s at “Bradham's Drug Store” in New Bern, North Carolina. The store's owner, a pharmacist named Caleb Bradham, created a caramel-colored soda from sugar, water, caramel, lemon oil, nutmeg, and other natural additives.

In 1893, the drink was sold under the name Brad's Drink, but in a few years, it would be renamed Pepsi-Cola, derived from the word dyspepsia, meaning indigestion. Originally it was marketed with just this attribute in mind: as a refreshing digestive aid. The drink quickly gained popularity which led Bradham to found the Pepsi-Cola Company in 1902 and patent the drink in 1903.

By the early 20th century, Bradham expanded the business as the drink became popular across the nation. But good times would turn into bad in the aftermath of World War I. Sugar rationing had caused prices to spike which led to financial difficulties for his soda company, and ultimately to its bankruptcy in 1923.

But the drink lived on after its trademark and secret recipe were purchased from the bankrupt estate. After changing owners again, the business landed with Charles Guth, a New York-based candy manufacturer. During the Great Depression, Guth revived the brand by competing with Coca-Cola, offering larger bottles at a lower price – a true value play in tough times.

Further reading: The Coca-Cola and Pepsi Duopoly: The Secret Ingredients

Over the following decades, Pepsi-Cola became a success – not only in the U.S. but also internationally. Eventually, the company began expanding its product offerings beyond its original drink. However, its most transformative moment would come in 1965 when it merged with the leading snack company Frito-Lay.

This merger turned the company from a soda maker into a diversified food and beverage giant, uniting Pepsi-Cola with popular snack brands like Lay's and Doritos under the new name PepsiCo. Since then, the company has continued to grow, evolving into the global powerhouse it is today, with its products reaching consumers worldwide.

As PepsiCo was formed in 1965, the former beverage company transformed into a food, beverage, and snack leader, with its products filling store aisles worldwide. Since then, diversification has remained a core strategy. As of 2025, PepsiCo's portfolio includes over 200 brands, with roughly 60% of its revenue coming from food and snacks, while the remaining 40% comes from beverages.

Beyond Pepsi, some of the company's most well-known brands include Mountain Dew, Tropicana, 7 Up, Gatorade, Lay's, Doritos, Cheetos, and Quaker Oats. Since 2022, PepsiCo also holds a minority stake in the fast-growing energy drink company Celsius.

In recent years, under CEO Ramon Laguarta, the company has increasingly shifted its portfolio of products toward healthier options. To better align with changing consumer preferences, PepsiCo has acquired brands focused on healthier products while divesting those with less nutritious offerings, and simultaneously working to improve its existing products:

Laguarta has also prioritized sustainability during his tenure as CEO and Chairman of the company. This focus drove PepsiCo's 2018 acquisition of SodaStream. By integrating SodaStream into its portfolio, the company has aimed to reduce global plastic waste by promoting reusable bottles and at-home carbonation.

The Pepsi brand has evolved significantly since its rebranding from Brad's Drink in 1898. Its original Pepsi-Cola logo featured red script lettering, resembling Coca-Cola, but was later redesigned to establish a distinct identity. In the 1940s, Pepsi adopted its now-iconic red, white, and blue color scheme – an American patriotic act during World War II, and a strategic move to differentiate itself in the market. The early 1950s saw the debut of the now iconic globe emblem.

Since then, the globe has undergone multiple refinements while remaining a core branding element. The 2008 redesign introduced a sleeker, more minimalist version, which is still in use today.

While Coca-Cola operates its distribution network through a franchise model, PepsiCo employs a hybrid system that varies between its beverage, and food & snack divisions.

For its beverage business, PepsiCo partially relies on third-party bottlers to manufacture, package, and distribute its drinks across its global markets. However, in some regions, the company owns and operates its own bottling facilities. In contrast, its food and snack products – such as Lay's, Doritos, and Quaker Oats – are primarily produced and distributed in-house. A key part of its snack distribution strategy is direct store delivery, allowing the company to oversee stocking and merchandising directly.

This strategic mix of in-house production and external partnerships allows PepsiCo to manage its diverse product lines flexibly, adapting to different market dynamics worldwide. PepsiCo sells its products through various channels, including large retailers, convenience stores, restaurants, and vending machines, reaching consumers in over 200 countries.

Shortly after the 1965 merger of Pepsi-Cola and Frito-Lay, the newly formed PepsiCo went public on the New York Stock Exchange. Since then, the company has consistently paid out dividends to its shareholders and has increased its annual dividend for 53 consecutive years.

This long-standing commitment to dividend growth has earned PepsiCo a place among the Dividend Kings – an exclusive group of companies that have raised their dividends annually for at least 50 years. Other notable members of this elite list include Coca-Cola, Procter & Gamble, 3M, Stanley Black & Decker, McDonald's, Lowe's Companies, and Kimberly-Clark.

What started with a local pharmacy creation has grown into a global giant in food, snacks, and beverages. From its early days as Pepsi-Cola to its expansion into snacks and beyond, the company has built a portfolio of some of the world's most recognized brands. As consumer tastes evolve, PepsiCo is making sure its products remain a staple in carts, coolers, and pantries worldwide.