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chip (crisps in British English) varieties as well as the name of the company that founded the chip brand in 1938. Lay's chips are marketed as a division of Frito-Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Lay group include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels HISTORY : HISTORY In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee. The business shortened its name to "the Lay's Company" in 1944 and became the first snack food manufacturer to purchase television commercials, with Bert Lahr as a celebrity spokesman. As the popular commercials aired during the 1950s, Lay's went national in its marketing and was soon supplying product throughout the United States. In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-Lay. In 1965, Frito-Lay merged with the PepsiCola Company to form PepsiCo, Inc. and a barbecue version of the chips appeared on grocery shelves. A new formulation of chip was introduced in 1991. In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax that was intended to compete with Pringles, and the company began introducing a variety of additional flavour variations. INTERNATIONAL DEMAND : INTERNATIONAL DEMAND Walkers is a snack food manufacturer in the United Kingdom best known for manufacturing crisps. PepsiCo has owned the Walkers crisp label in the United Kingdom since 1991 and distributes Lay's product via this brand name. In The Netherlands Lay's are sold in three varieties: Lay's, Lay's Light and Lay's Sensations (Thai Sweet Chili/Red Paprika/Oven Roasted Chicken and Thyne). In Canada, the chips are distributed through the Lay's label . In Israel, the Lay's label is distributed with the name Tapochips ( )'In France, the famous singer Sbastien 'Angel' De Sousa from the Arthur Crew is sponsored by Lay's corp. In Argentina, Lays was commercialized before 2001 with the name Frenchitas and Chizitos for the Cheetos . In Australia, Pepsico acquired the The Smith's Snackfood Company in 1998 and marketed Frito-Lay products under that label, using the name Thins SLOGAN : SLOGAN Happiness is Simple. (2009) Simply Made. Simply Good. (2009) That's another reason to smile! (2007) Food for the fun of it! (2007) Lay's, get your smile on! (2006-) Lay's. Want some? Betcha can't eat just one (1960s2006) ! (Nobody can eat just one) (Lay's Greece) COMPANY VISION : COMPANY VISION What happens when 48,000 people focus on a single vision? Something wonderfula company thats all about good fundoing good things when it comes to making snacks and caring for the environment. You get a company called Frito-Lay, a proud member of the PepsiCo family. For more than 75 years, we have enjoyed making the best snacks on earth, starting with simple, farm-grown ingredients. And we're not stopping now. We continue to innovate, so we can provide tasty products that are good as well as fun. And we're reducing our environmental footprint by conserving natural resources as well as harnessing renewable energy technology that reduces harmful emissions. We know we still have a lot of work to do, but were up to the challenge. We've had a lot of good fun along the way, and we'll continue that as we look to the future. Because that is what Frito-Lay is all about. These days, our founders' dream to be America's favorite snack food company continues to be fulfilled by more than 45,000 Frito-Lay employees in the United States and Canada who make, sell, and deliver a wide variety of fun and environmentally friendly foods for you to enjoy. GROWTH $ INCOME : GROWTH $ INCOME We market hundreds of brands in approximately 200 countries and territories around the world. The consumers who eat and drink our products spent an estimated $107 billion on our brands in 2009. GROWTH $ INCOME : GROWTH $ INCOME PepsiCo has 18 mega-brands that generate $1 billion or more each in annual retail sales. In addition to benefiting our own associates, this powerful performance helps support our independent bottler network and distribution operations, and contributes to the sales of retailers throughout the world. Our economic reach is broad and deep and sustainable.

ECONOMIC CONTRIBUTION : ECONOMIC CONTRIBUTION Shareholders--We provide shareholders with a strong return on their investments. In 2008, we paid $2.5 billion in dividends and provided shareholders with a 12 percent return, which is stock appreciation plus dividends reinvested. Employees--We directly employ approximately 198,000 employees. Our customers and business partners, such as franchised bottlers and licensees, employ tens of thousands of additional people as they manufacture and distribute our brands. Retailers--We create income and profit for our customers, which means jobs and opportunities in millions of retail establishments around the world. Our brands are among the most profitable brands that retailers carry. Suppliers--We purchase millions of dollars of supplies, services and raw materials that help to support hundreds of thousands of additional jobs in communities around the world. ECONOMIC CONTRIBUTION : ECONOMIC CONTRIBUTION Beginning in 2009, we realigned certain countries within PI to be consistent with changes in geographic responsibility. As a result, our businesses in Turkey and certain Central Asia markets will become part of United Kingdom & Europe, which was renamed the Europe division. These countries were formerly part of Middle East, Africa & Asia, which was renamed the Asia, Middle East & Africa division. COMPETITORS : COMPETITORS Our businesses operate in highly competitive markets. We compete against global, regional, local and private label manufacturers on the basis of price, quality, product variety and distribution. In U.S. measured channels, our chief beverage competitor, The Coca-Cola Company, has a larger share of CSD consumption, while we have a larger share of liquid refreshment beverages consumption. In addition, The Coca-Cola Company has a significant CSD share advantage in many markets outside the United States. Further, our snack brands hold significant leadership positions in the snack industry worldwide. Our snack brands face local and regional competitors, as well as national and global snack competitors, and compete on the basis of price, quality, product variety and distribution. Success in this competitive environment is dependent on effective promotion of existing products and the introduction of new products. We believe that the strength of our brands, innovation and marketing, coupled with the quality of our products and flexibility of our distribution network, allow us to compete effectively. KEY CHALENGES AND STRATEGIES FOR GROWTH : KEY CHALENGES AND STRATEGIES FOR GROWTH To achieve our financial objectives, we consistently focus on initiatives to improve our results and increase returns for our shareholders. For 2009, we have identified the following key challenges and related competitive strategies for growth that we believe will enable us to achieve our financial objectives: SUCCESSFULLY NAVIGATING THE GLOBAL CRISIS : SUCCESSFULLY NAVIGATING THE GLOBAL CRISIS We and our customers, suppliers and distributors have all been impacted by the continuing global economic crisis. Global economic conditions have resulted in decreased consumer purchasing power, volatile fluctuations in the prices of key commodities such as oil, corn, sugar and oats and adverse foreign currency exchange rates. To navigate through these conditions we plan to continue to focus on fundamentals, such as ensuring that we offer products with the right price to value proposition and managing cash flow, interest expense and commodity costs. We have also implemented our Productivity for Growth program which is expected to cumulatively generate more than $1.2 billion in pre-tax savings over the next three years and that will also allow us to increase investments in long-term research and development, innovation, brand building and marketspecific growth initiatives. THANX : THANX