1. PepsiCo & Stakeholder Engagement Enhancing Enterprise Value
November 2012

2. Critical Thinking At The Critical Time
FTI Consulting is a global business advisory firm that provides multidisciplinary solutions that help clients address complex business opportunities and challenges. 20 40 60 80
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DEPTH
EXPERTISE
TRUSTED
We are 3,800 trusted advisors with diverse expertise and exceptional credentials serving clients globally
Our breadth and depth extends across every social, political, and economic hub across the globe
We combine unparalleled expertise and industry knowledge to address challenges to enterprise value

3. Our Global Network
Broad global reach encompassing approximately strategic communications experts and a total of 3,800 business consultants in 23 countries around the world
Proven ability to manage global issues with local expertise

4. The PepsiCo Team
The FTI PepsiCo team will be staffed with an integrated team of experienced professionals who focus on the food and beverage industry.
Bob Knott
Program Director
Beth Saunders
Strategic Counsel
Jeannine Dowling
Mgr., Stakeholder Engagement
John Watts
Mgr., Stakeholder Identification & Mapping
Mitzi Emrich
Online Engagement
Linda Mayer
Jocelyn Landau
Sacha Mohabeer
Anshula Ahluwalia
Jeremy Ruch
Adam Sopko

5. Helping Brand And Market Leaders Advance Their Businesses
Reinforced the company’s market leadership and reputation, despite the commoditization sweeping the insurance industry, while raising its profile as a leading advocate for the economic wellbeing of America’s middle class.
Communicated transformation and long-term strategy to position the company as a leader in science and innovation.
Created an engagement strategy to help deepen stakeholder’s commitment and belief to its new CEO’s Vision 2020.
Managed the communications surrounding the explosion of its Deepwater Horizon rig, widely characterized as the BP Oil Spill, including the engagement of various internal and external stakeholders regarding the company’s ongoing operations.
Created a grassroots strategy that engaged consumers to combat pending state and federal legislation that would adversely affect the company’s corporate strategy.
Worked with executive management to raise visibility in the US and create a new positioning theme. Facilitated introductions between Tata executives to develop US-based relationships.

6. Our Unique Approach: Enhancing Enterprise Value
FTI is uniquely capable of developing and implementing communication campaigns that enhance and protect a company’s enterprise value.
Our approach emphasizes the effective engagement of employees, customers, governmental publics and third parties, in addition to investors, analysts and other members of the financial community — a diversity of essential stakeholders we are uniformly adept at reaching and influencing.
Through the use of unified messages that resonate with each of these stakeholders, as well as a coordinated approach to communications, FTI not only enables companies to achieve committed workforces, reputational leadership and an increased license to operate, but also an optimal valuation of their stock.
Engaged Leadership,
Committed
Workforce
Reputational
Leadership with
Opinion Leaders
and Partners
License to
Operate with Public and Regulators
Optimal Valuation in Capital Markets

7. Our Approach: How It Works
Thoughtfully consider and internalize management’s plans
Analysts echo PepsiCo views
Attract / retain desired investor base
Provide “time” when needed, based on belief in management
Behaviors
Engaged Leadership,
Committed
Workforce
Reputational
Leadership with
Opinion Leaders
and Partners
Operate with Public and Regulators
License to
Optimal Valuation in Capital Markets
Behaviors
Commitment to company
Productivity
Company ambassadorship / active articulation of PepsiCo’s perspective
Articulate the economic importance of PepsiCo and the industry
Acknowledge PepsiCo’s contributions / leadership
Listen to and incorporate PepsiCo views
Refrain from or amend restrictive laws / regulations
Behaviors
Behaviors
Constructively engage with PepsiCo in public forums
Cite or refer to PepsiCo and PepsiCo experts’ views positively
Understand and internalize all of PepsiCo’s strategic directions

8. Understanding PepsiCo’s Objectives
Develop a comprehensive influencer engagement strategy and program that will:
Increase the credibility and resonance of PepsiCo’s near and long-term business strategy
Educate and increase understanding of PepsiCo’s position around key issues
Ensure the perception of PepsiCo’s past and present trajectory is validated and amplified
This program will operationalize PepsiCo’s strategic goals:
Brand Building
Innovation
Execution
Productivity
Return to Shareholders

9. Attitudes and opinions in the U.S. of the food and beverage industry

10. − 10 −

11. Obesity Influences the Dialogue
There’s a growing global health paradox: while people in developing nations are increasingly overweight, many of these consumers are undernourished. Fast food, processed foods, sweets and snacks may be part of the problem, but they fit seamlessly into a broader story that few stakeholders fully understand. As a result of this landscape, regulators, health professionals and industry leaders have become more focused on calories from beverages and processed foods, while also increasing their scrutiny of food labels and health claims and industry-supported research.
− 11 −

12. Social Media is Mainstream Media
What makes the current food environment so daunting is the connectivity of the digital age. Social media often drives or amplifies what happens in traditional channels such as top-tier daily publications or online news and commentary channels. Conversations and content about nutrition, health and food products are amplified through the food community, creating an echo chamber that often starts with experts and is carried by enthusiasts and average consumers.

13. The Rise of the “Corp-sumer”
When it comes to issues and advocacy, consumers and activists have more than an opinion – they have a voice. Consumers are passionate about their food choices and about the companies they buy from; they’ll take action for or against you based on how you engage with them on the issues and initiatives they care about

14. A New Issue Import/Export Dynamic
As multi-nationals enter new markets, the old paradigm of food issues being limited to developed markets and by geographic boundaries has changed. As markets develop, issues develop with them and new influencers join others in driving conversations. Navigating the complexity now and engaging in meaningful ways is critical to success.

15. “Glocal” Thinking and Doing is a Must
What we eat has personal, political, social, environmental and economic implications across the globe. From obesity to food ingredients, sustainability to food safety, food security to commodities pricing, food issues dominate our global and local food dialogues, and shape the way companies and industries enter new markets and do business in those markets. Understanding the issues that are being discussed at the local and regional levels, the influencers who are driving those conversations, and the nuances of local and regional market engagement is critical to your success.

16. Influencers Use Peer-to-Peer Networks to Create Social Currency
Deeply engaging financial thought leaders, health professionals, influencers and other stakeholders means reaching them in the online communities they know and regularly use. Creating a unique presence on the niche social networks that are important to key audiences helps build credibility and trust – relationships that start online can become the foundation for finding vocal supporters who can take action offline.

17. How Others In the Industry Are Reacting to the Landscape
From Candy to Innovation: With the world’s cocoa supply at risk, concentrated primarily in West Africa and susceptible to disease, and stakeholders calling for support of impoverished cocoa farmers, Mars decided to take action. In mapping the cocoa genome, Mars was seen as a leader, bringing solutions to a delicate agricultural and economic problem.
More than Just Coffee: While suffering declining financial returns and an increasingly competitive market, Starbucks heralded the return of CEO Howard Schultz and highlighted its deep bench of talented executives by partnering its thought leaders with select stakeholders in a series of global conversations, securing the company’s corporate reputation as a leader in not just coffee, but in responsible capitalism, corporate citizenship and sustainability.
Thinking Local: In the wake of a series of crises over the sourcing and ingredients of products sold in its restaurants, Yum! launched a global program that tracked and anticipated food and nutrition-related issues and influencers, leading to many of its brands announcing reformulated products based on unique market demands around the world.
Healthy Food Initiative: After successfully demonstrating that sustainable products should not and do not need to cost more for its customers, Walmart brought those same principles to healthy foods. Declaring that no family should ever have to make a choice between foods they can afford and foods that are good for them, Walmart announced a program with Michelle Obama’s Let’s Move! that includes working with manufacturers to reformulate packaged goods, creating its own healthy foods seal, and lowering prices on fruits and vegetables. .

18. Stakeholder Identification & Mapping

19. PepsiCo’s Essential Stakeholders
Health and Nutritional Groups
Financial Community
Governmental Publics
Health Professionals
Key Opinion Makers
Bloggers, Citizen Journalists
News Media
Online Community

20. Stakeholder Mapping on Parallel Paths
Parallel paths address near-term opportunity and long-term, documentable results.
Immediately
Phase 1
Phase 2
ONLINE MAPPING .
RESEARCH-LEAD MAPPING
Identify Hot Spots
Manage brush fires
Identify the most vocal, credible and trusted sources
Reach out and engage the most vocal, credible and trusted sources
Manage and drive the conversation
Map stakeholders by current vs. desired attitudes and behaviors, influence, and impact on achievement of our business objectives
Develop plans for most vocal, influenceable, influential and valuable
Track success via measures of opinion, engagement and behavior

21. The Research-led Mapping Process
To facilitate effective engagement over the long-term,
we take a structured approach to mapping stakeholders
and design communications that drive engagement and behavior.
PLAN OBJECTIVES
Design “backwards” from the themes and message we wish to establish.
IDENTIFY
ID stakeholder groups, critical sub-segments.
MEASURE
Develop measurement relative to influence and perceptions across groups.
MAP
Map stakeholders based on influence and perception.
ANALYZE
Plan strategies and tactics using each groups specific attitudes and behaviors.
ADDRESS ISSUES
Plan “special weapons and tactics” to address unique situations and opportunities.

22. The Research-led Mapping Process
PLAN OBJECTIVES
IDENTIFY
MEASURE
MAP
ANALYZE
STRATEGY CREATION
While PepsiCo has clear strategic vision and initially-identified stakeholders, a research-driven approach will ensure we know precisely “who” needs to hear “what” and “how.”
The objectives developed in this stage will operationalize PepsiCo’s strategic goals:
Brand Building
Innovation
Productivity
Execution
Return to Shareholders

23. The Research-led Mapping Process
PLAN OBJECTIVES
IDENTIFY
MEASURE
MAP
ANALYZE
STRATEGY CREATION
Ability to Influence
Level of Engagement
The resulting stakeholder map provides a holistic view of your messaging landscape, along with strategic and tactical insights.
Certain “loud voices” may be unmovable, and require development of credible surrogates more likely to support PepsiCo while we identify the key advocates we need to continue to engage.

24. The Research-led Mapping Process
PLAN OBJECTIVES
IDENTIFY
MEASURE
MAP
ANALYZE
STRATEGY CREATION
Key Opinion Leaders frame and lead the debate. They are informed, vocal and have an impact beyond their own group.
Broader Opinion Elites have an interest in the issue and a degree of influence in its outcome. They can play a more active role if engaged.
Informed Influencers are able to influence groups above but have no decision making capacity in official debates.
At the top of the pyramid, special strategies are often required.
Focusing on “the” issue of most interest to the individual is both possible and critical.
Whether due to beliefs, position or role, some can be intractable and immovable, requiring development of other equally credible individuals to articulate “your” view.
Engagement & Influence

25. FTI’s Process for Digital Stakeholder Mapping
Digital Stakeholder Identification and Mapping
By mapping digital stakeholders, PepsiCo can identify online personalities who have the potential to become vocal online ambassadors for the company’s initiatives and designate an approach for activating them.
Engagement
Influence
Popularity
Trust
Measure Online Authority
Ensure Participation in Relevant Conversation
Uncover Shared Interests
Develop Opportunities for Partnership
FTI’s Process for Digital Stakeholder Mapping
Fooducate
MomRN
TreeHugger
JollyTomato
SuperHealthyKids

26. Food Advocates & Enthusiasts Food & Nutrition Experts
Amplifying Messages Throughout the Food Community
Online conversation shapes media coverage, government action and consumer opinion –ultimately impacting a company’s bottom line. Conversations about the business and social impacts of food are shared and reverberate amongst a tight-knit group of stakeholders who are deeply connected to PepsiCo and its competitors, providing the opportunity to reach broad audiences by targeting a few key digital influencers.
Food Advocates & Enthusiasts
Food & Nutrition Experts
Consumers

27. Identifying Short-term Hotspots
A multi-stakeholder world means opinions are formed across diverse channels, a debate can start anywhere and new influencers can rise to prominence each day.
Navigating the complexity and engaging stakeholders in meaningful ways is critical to success, but PepsiCo must first start with the potential allies and influencers who are the most vocal, credible and trusted sources of information.
FTI will immediately leverage its global heat-mapping tool to identify and chart a course for engaging prime stakeholders early, securing initial wins that will help PepsiCo establish broader relationships in key communities.

28. Stakeholder Engagement

29. Connected to Strategy Outcomes
Our Principles to Advance Engagement
Authentic engagement underlies all strategic alliance development efforts
Guided by Goals 1
Relationship Based 2
Connected to Strategy Outcomes 3

30. Steps to Cultivating Stakeholders1 2 3 4 5
Frame messages for individual
Engage stakeholders
Measure results in real time
Respond accordingly
Identify individuals’ attributes and commitment

31. Build Relationships with Potential Advocates
Incentivize with insights and unique experiences Build proactive and offline relationships by giving stakeholders exclusive and advanced access to products, internal experts, tools and programs before they are launched. Leverage partnerships with reputable offline groups to promote the progress of PepsiCo’s initiatives and help stakeholders understand the company’s relationships with credible groups. Provide regular comments on news and issues core to PepsiCo’s business, offering a unique and reliable perspective on prominent issues.
Take the lead in making the issues accessible
Educate diverse audiences with engaging information in the form of videos, interactive infographics and other multimedia to share perspectives and messages unique to PepsiCo.
Have a presence where your advocates spend their time

32. Once the identification process is complete, stakeholders will be mapped against “influence” and “level of engagement” to guide decisions on strategic communications tactics.
Once the identification process is complete, stakeholders will be mapped against “influence” and “level of engagement” to guide decisions on strategic communications tactics.

33. Contact detail: store typical contact information (address, phone, , etc.).
Custom fields: create limitless data points to categorize contacts; store additional relevant info; page view can be collapsed for accessibility.
Tracking & ownership: assign contact owner, monitor when record created or last updated.

34. Performance Metrics

35. OUTPUTS IMPACTS OUTCOMES
Our programs center around measurement. We will work in partnership with your team to create a shared vision of success at the outset of the program based on:
OUTPUTS
FTI work products
Project management / tracking tools, including contact tracking (e.g. via Salesforce or similar)
Activity tracking, by period and by key stakeholder group.
Examples:
# briefings / meetings
# contacts made
# site visits driven in
# articles placed citing key messages
# blog mentions citing key messages
IMPACTS
Changed opinions, attitudes, beliefs / knowledge, “leading indicators”
Periodic pulse checks via in-depth interviews among KOLs and other specialist groups,
Delphi panel responses,
Survey larger groups (public influentials, investors),
Media audits
Examples:
Volume and % favorable media coverage
Volume and % favorable social media discussion
% of message penetration, with or without PepsiCo attribution
% who know PepsiCo’s position
% hearing/believing messages
% with aligned views
OUTCOMES
Changed behavior
Communications / contact tracking tools (e.g. Salesforce or similar)
Media audits / tracking including traditional and social channels, by influence
Regulatory filings / state and local codes
Examples:
# requests for information
# attending conferences / events
Volume and % actively articulating preferred views
Volume and % favorable media coverage
Volume and % favorable social media discussion
# 3rd party endorsements
# (foreseen) unfavorable laws / regulations avoided or modified
Focus
Tools
Examples

36. Institutionalizing Relationships
Institutionalizing relationships between PepsiCo and its key influencers through a contact management system will help knowledge-sharing across the FTI and PepsiCo team as well as create a database of information to be used long-term, ultimately driving these relationships across the PepsiCo enterprise.

37. Biographies