PepsiCo has created a rule for its beverage and food production business: not a single dollar is spent on concrete, steel or equipment without first doing that project virtually. Faced with a public goal of maintaining controlled Capex levels, the company has used software systems integrated into plants that are leading the company to a reduction in capital costs and a reduction in operational problems in new projects.
“This is one of the main precepts that now guide our operations at PepsiCo.
We will not do anything, we will not make any capital investment, without first designing digitally and then implementing physically”, said the company’s global vice president of manufacturing, Steven Hoinka, in a presentation at Simens Digital Industries’ Realize LIVE event.
In one case of its operation in the United States, the company recently integrated the logistics of its beverage operations, which includes the Pepsi and Gatorade brands, with the snacks vertical, such as Doritos and FritoLay. “These businesses have historically operated independently in the United States. We want to integrate them to unlock agility, efficiency and capabilities,” said the executive.
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The idea was to remove parts of the warehouses from two of the company’s existing facilities and channel the products directly to a joint distribution center. The company used technology called , based on Nvidia hardware, to test how the installation would work.
Digital twins work, suggestively, like copies of physical factories run on computers. Based on simulations in three and two dimensions, these virtual models capture in real time everything that happens in a factory and can also test changes: the addition of a conveyor belt, the layout of a machine.
According to Hoinka, the result of tests based on the technology was savings of 10% to 15% in capex for the project, in addition to a 90% reduction in potential related operational problems. “It’s never perfect. You’ll probably still learn new things. But it gives you a tremendous advantage when it comes to new implementations, new uses of existing facilities,” he points out.
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Since the beginning of 2025, PepsiCo has pointed out that one of its goals, according to the company’s quarterly results releases, is to maintain the level of capex — investments in capital, such as machines, factories and warehouses — below 5% of its net revenue. In 2025, this ratio was approximately 4.7%, when revenues reached US$93.9 billion and expenditures of this type, US$4.4 billion.
*the reporter traveled at the invitation of Siemens
