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  "docSlug": "8b17eeb54806",
  "documentTitle": "PepsiCo (PEP)",
  "authorId": "06_Trian_Partners",
  "authorName": "Nelson Peltz",
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  "sourceTypeSlug": "activist_investor",
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  "presentationDate": "2014-02-19 00:00:00",
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  "notes": "The text uses the 'robbing Peter to pay Paul' metaphor to describe the internal capital allocation conflict.",
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      "kind": "callout",
      "text": "PepsiCo cannot continue to oscillate investment dollars between snacks and beverages (i.e., “robbing Peter to pay Paul”) or it risks impairing its brands.",
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      "kind": "paragraph",
      "text": "Frito-Lay is one of the best food brands out there... We trace the reasons back to Americas Beverages and PepsiCo's holding company structure.",
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      "kind": "paragraph",
      "text": "Frito-Lay saw improvement in 2013... Americas Beverages volume declines have materially worsened (-3%)... We suspect the pendulum has swung... 'robbing Peter to pay Paul'.",
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      "text": "While Frito-Lay delivered terrific third and fourth quarters in 2013... only two questions were about Frito-Lay... snacks business represents two-thirds of PepsiCo's overall value.",
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      "kind": "paragraph",
      "text": "When Trian suggested that a standalone Frito-Lay could be valued at a similar multiple to Hershey (25.2x 2014 estimated earnings per share vs. 17.0x for PepsiCo)...",
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      "text": "From 2002-2007, Frito-Lay was thriving... Management first cut advertising... aggressive Frito-Lay price increases (4% on average)... Frito-Lay volume growth slowed to ~1% annually.",
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      "kind": "title",
      "text": "Americas Food (38% of overall PepsiCo sales; 73% of total snacks sales) has been forced to subsidize weak beverage trends",
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