PEP · 10-Q · 2026Q3 · Full report

Commodity and Supply Chain Risks

PEPSICO INC · 2026-10-08 · Importance 19 · Surprise 6

PepsiCo buys many commodities used to produce and transport its products in open markets and manages price exposure with fixed-price contracts, purchase orders, pricing agreements and derivatives. Volatile geopolitical conditions, inflation, trade restrictions and tariffs, adverse weather and supply disruptions have affected and may continue to affect commodity, transportation and labor costs; conflict in the Middle East continues to disrupt global supply chains and influence commodity prices. PepsiCo may not pass higher costs on to customers, potentially reducing product volume, revenue and margins.

Key facts

• Climate-related laws, regulations and sustainability initiatives could significantly increase PepsiCo's costs and require additional investments in facilities and equipment. source
• PepsiCo's commodity, transportation and labor costs have been impacted and may continue to be impacted by geopolitical conditions, inflation, import/export restrictions and tariffs, adverse weather and supply chain disruptions. source
• PepsiCo manages commodity price risk using fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures. source
• Conflict in the Middle East continues to disrupt global supply chains and affect commodity prices. source
• When commodity prices increase, PepsiCo may or may not pass the increases on to customers, potentially reducing volume, revenue, margins and operating results. source