PEP · 10-Q · 2026Q2 · Full report

Commodities and Supply-Chain Volatility

PEPSICO INC · 2026-07-09 · Importance 44 · Surprise 24

PepsiCo discloses that many production and transportation commodities are purchased on open markets and that prices and availability are volatile due to geopolitical conditions, weather and supply-chain disruptions, including ongoing conflict in the Middle East. The company manages commodity exposure via fixed-price contracts, purchase orders, pricing agreements and derivatives (swaps and futures) and centrally marks-to-market certain derivative positions, with mark-to-market volatility sitting in corporate unallocated expenses until underlying costs are recognized in segments. Management warns that higher commodity input costs may not always be passed through to customers, which could reduce volume, revenue and margins. The filing quantifies commodity-related headwinds in several segments (e.g., PBNA cited a ~5–6 percentage-point impact of higher commodity costs in operating profit commentary).