The Pepsi Bottling Group
The Pepsi Bottling Group was a major Pepsi-Cola beverage bottler and distributor that became a wholly owned PepsiCo subsidiary in 2010.
Last updated August 31, 2026
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Overview
The Pepsi Bottling Group, Inc. was a large international bottling and distribution company focused on Pepsi-Cola beverages. Rather than being primarily a consumer-facing soft-drink brand, it operated as part of the franchise and supply-chain system behind PepsiCo's beverage portfolio, manufacturing, selling, and distributing Pepsi-Cola products in defined territories. At its peak, PBG was described as the world's largest Pepsi-Cola bottler. Its territory covered all or parts of 43 U.S. states, the District of Columbia, nine Canadian provinces, Spain, Greece, Russia, Turkey, and Mexico. Approximately 70 percent of its volume came from the United States and Canada, while its sales represented more than half of Pepsi-Cola beverages sold in the United States and Canada and roughly 40 percent of Pepsi-Cola beverage sales worldwide. PBG's business model combined beverage production, packaging, route-to-market operations, distribution, sales execution, and customer service. Its customers and channels included retailers, food-service operators, convenience stores, restaurants, vending operations, and other outlets. The company therefore played an important operational role in translating PepsiCo's beverage brands into local market availability, while working within geographic bottling rights and agreements. Its portfolio centered on Pepsi-Cola beverages and also included distribution activity for selected related products. In February 2009, PepsiCo announced a multiyear distribution agreement for Rockstar Energy Drink under which PBG and other Pepsi bottlers would distribute Rockstar in most of the United States and all of Canada. The company faced significant pressure during the global economic downturn of the late 2000s. In 2008, management reported weaker consumer demand across several regions, with volume declines in Europe and Mexico as well as North America. Russia was affected by economic volatility and food inflation, Spain by the housing downturn, and Mexico by weaker consumer confidence associated in part with reduced remittances from the United States. PBG responded with a multiyear restructuring program called “Structured to Succeed,” which included workforce reductions, facility closures, distribution changes, and operating efficiencies across North America, Europe, and Mexico. The restructuring and impairment charges contributed to a substantial fourth-quarter loss reported in February 2009. On August 4, 2009, PepsiCo announced the purchase of PBG together with PepsiAmericas, another major Pepsi bottler. The transactions were completed on February 26, 2010. The combined operations were placed into Pepsi Beverages Company, a wholly owned PepsiCo subsidiary. The acquisition ended PBG's existence as an independent publicly traded bottling company and consolidated a substantial portion of PepsiCo's North American and international bottling system under direct PepsiCo ownership.
History
The Pepsi Bottling Group developed as a major bottling and distribution arm for Pepsi-Cola beverages. Its role was defined by territorial bottling rights: the company manufactured, marketed, sold, and distributed PepsiCo beverages in specified regions rather than controlling the global Pepsi brand itself. Based in Somers, New York, PBG served a broad geographic network spanning the United States, Canada, several European countries, Russia, Turkey, and Mexico. Its North American operations represented the largest share of activity, accounting for approximately 70 percent of total volume. PBG's significance came from its scale and route-to-market capabilities. Bottlers converted beverage concentrates and brand programs into packaged products available through supermarkets, convenience stores, restaurants, food-service accounts, vending channels, and other retail outlets. The company's sales organization, manufacturing facilities, distribution centers, delivery routes, and local-market relationships were central to PepsiCo's ability to compete in carbonated soft drinks. PBG was described as the world's largest Pepsi-Cola bottler, and its sales accounted for more than half of Pepsi-Cola beverages sold in the United States and Canada and approximately 40 percent worldwide. By 2008, PBG was operating in a difficult economic environment. Third-quarter results showed revenue growth but lower earnings and weaker volumes. Management attributed the pressure to soft consumer demand across geographies. European volume declined, with Russia affected by economic volatility and food inflation and Spain affected by the housing downturn. Mexican case volume also fell sharply, alongside weaker consumer confidence and reduced remittances from the United States. These conditions illustrated the sensitivity of a bottling company to household spending, commodity and food inflation, regional economic cycles, and retail traffic. PBG responded with the Structured to Succeed program, a multiyear restructuring intended to improve operating efficiency. The plan involved approximately 3,150 job cuts, equal to about 4.5 percent of the workforce according to the cited reference material. In the United States and Canada, the program included approximately 750 job reductions and the closure of four facilities. European streamlining affected approximately 200 jobs. In Mexico, the company planned to close three plants and 30 distribution centers and eliminate 700 routes, affecting approximately 2,200 jobs. The restructuring produced substantial charges and was followed by a fourth-quarter 2008 loss reported in February 2009; the company also recorded a non-cash impairment charge primarily related to Mexico. PBG continued to expand the range of beverages it could distribute through its established network. In February 2009, PepsiCo announced a multiyear distribution agreement for Rockstar Energy Drink. PBG, PepsiAmericas, Pepsi Bottling Ventures, and other independent Pepsi-Cola bottlers were to distribute Rockstar in most of the United States and throughout Canada. The agreement illustrated how the bottling system could support beverages beyond the traditional Pepsi-Cola line. The company's independent corporate existence ended through PepsiCo's acquisition strategy. On August 4, 2009, PepsiCo announced that it would purchase PBG and PepsiAmericas. The transactions were completed on February 26, 2010, creating Pepsi Beverages Company as a wholly owned PepsiCo subsidiary. PBG therefore became part of a more centrally controlled PepsiCo beverage operation rather than continuing as a separate public bottler. Its history is best understood as that of a large franchise-based beverage manufacturer and distributor whose infrastructure was ultimately reintegrated into the brand owner's corporate system.
- 2010
Acquisition completed
[1]PBG became part of Pepsi Beverages Company, a wholly owned PepsiCo subsidiary.
- 2009
Rockstar distribution agreement announced
[1]PBG and other Pepsi bottlers were selected to distribute Rockstar Energy Drink in most of the United States and all of Canada.
- 2009
PepsiCo announces acquisition
[1]PepsiCo announced plans to purchase PBG and PepsiAmericas.
- 2008
Third-quarter earnings decline amid weaker demand
[1]PBG reported lower third-quarter earnings despite a 2 percent revenue increase to $3.8 billion, citing weaker consumer demand and volume declines in Europe and Mexico.
- 2008
Eric Foss becomes board chairman
[1]Chief executive Eric Foss was promoted to chairman of the board.
- 2008
Structured to Succeed restructuring announced
[1]The company announced workforce, facility, route, and distribution changes intended to improve global operating efficiency.
Products and positioning
A large-scale, territory-based bottling, sales, and distribution operator supporting PepsiCo's beverage brands rather than a standalone consumer brand.
Carbonated soft drinks
Pepsi-Cola beverages
PBG's core business was the manufacture, sale, and distribution of Pepsi-Cola beverages under territorial bottling rights. The company supplied packaged Pepsi products to retail, food-service, convenience, vending, and other channels across its North American, European, and Latin American markets. Its scale made it one of the most important operational platforms for PepsiCo's flagship cola line.
Diet carbonated soft drink
Diet Pepsi
Diet Pepsi was among the PepsiCo beverage products distributed through Pepsi bottling territories. PBG's role was production, packaging, sales, and delivery rather than ownership of the consumer brand. The product was supplied through the company's established retail and food-service distribution network.
Carbonated soft drinks
Mountain Dew
Mountain Dew and related PepsiCo carbonated beverages were handled through the company's bottling and distribution infrastructure in applicable territories. PBG's activities connected PepsiCo brand marketing with local production, route delivery, and retail execution.
Energy drink · 2009
Rockstar Energy Drink
Rockstar became an important distribution addition through PepsiCo's February 2009 multiyear agreement. PBG was one of several Pepsi bottlers responsible for distributing the energy-drink brand in most of the United States and all of Canada, using its existing sales and delivery infrastructure.
Brand decisions
2009
Rockstar Energy Drink distribution agreementProduct launchBackground
PepsiCo sought to use its bottling network to broaden the distribution reach of Rockstar Energy Drink.
Action taken
PBG and other Pepsi bottlers agreed to distribute Rockstar in most of the United States and throughout Canada.
Aftermath
The agreement expanded the products moving through PBG's existing sales and delivery system before the company was absorbed into PepsiCo.
2009
PepsiCo acquisition agreementM&ABackground
PepsiCo announced the purchase of PBG and PepsiAmericas in a move to consolidate major Pepsi bottling operations under the brand owner's control.
Action taken
PepsiCo agreed to acquire the two bottlers; completion followed on February 26, 2010.
Aftermath
PBG ceased to operate as an independent company and became part of Pepsi Beverages Company, a wholly owned PepsiCo subsidiary.
2008
Launch of the Structured to Succeed restructuringStrategyBackground
PBG faced weaker consumer demand, declining volumes in several regions, and pressure to improve the efficiency of its international bottling operations.
Action taken
The company announced approximately 3,150 job reductions, facility closures, distribution-center closures, route eliminations, and other operating changes across North America, Europe, and Mexico.
Aftermath
The program generated restructuring costs and contributed to a substantial fourth-quarter loss, but was intended to reduce costs and improve operating efficiency.
Recent events
- 2010
PBG acquisition is completed and Pepsi Beverages Company is formed[1]
M&A
The acquisition of PBG and PepsiAmericas was completed, and the operations became part of Pepsi Beverages Company, a wholly owned PepsiCo subsidiary.
- 2009
PBG reports a fourth-quarter loss and impairment charges[1]
Other
PBG reported a fourth-quarter net loss of $271 million. The result included a $336 million after-tax restructuring charge and a non-cash asset impairment charge associated primarily with its Mexican business.
- 2009
PepsiCo announces Rockstar distribution agreement[1]
Product launch
PepsiCo announced a multiyear agreement under which PBG and other Pepsi bottlers would distribute Rockstar Energy Drink across most of the United States and all of Canada.
- 2009
PepsiCo agrees to acquire PBG and PepsiAmericas[1]
M&A
PepsiCo announced the purchase of PBG and PepsiAmericas, moving to bring major bottling operations under direct ownership.
- 2008
PBG reports weaker third-quarter earnings amid softer demand[1]
Other
The company reported third-quarter net income of $231 million, or $1.06 per share, compared with $260 million, or $1.12 per share, in the year-earlier period. Revenue increased 2 percent to $3.8 billion, while volume declined in Europe and Mexico as consumer demand weakened.
- 2008
Eric Foss becomes chairman of the board[1]
Leadership change
Eric Foss was promoted to chairman of PBG's board while continuing as chief executive officer.
- 2008
PBG announces the Structured to Succeed restructuring[1]
Other
PBG announced a multiyear cost and efficiency program involving approximately 3,150 job reductions, facility closures, and distribution changes across North America, Europe, and Mexico.
Sources1 sources
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