BE LIKE PEPSI - during this unprecedented time

I have noticed so many messages regarding “we will get through this together” and I certainly agree. But what can we tangibly do beyond empathetic assistance? I can’t but help to think about one of my favorite stories about partnership – Pepsi and Marriott.

Now please forgive me in advance if I get some of the details wrong. I simply don’t have time for complete research but the details really don’t matter. In the early ‘90s Marriott was facing serious financial struggles. They had leveraged and refinanced most everything through traditional lenders to the max, but they were still facing bankruptcy. Marriott called upon some of its largest suppliers to help with additional financing, including Coca Cola and PepsiCo.

Coke decided, and I totally understand their business decision, that they were not a financial services company and declined to loan Marriott money. Pepsi did the opposite and provided needed capital to Marriott and helped them weather the economic storm. Now you know why Marriott’s all serve PepsiCo products only (unless you make a special request for banquet events).

Fast forward 25 or so years to 2016 and Marriott purchases Starwood. Then in 2018, Marriott announces that Pepsi will become the beverage provider for Starwood brands as well. Wow, that is a market share bump for Pepsi products! This is in addition to other PepsiCo preferred beverages for Marriott, and now Starwood too, such as Aquafina, Bubbly, Tropicana and Gatorade. And don’t forget preferred food products from PepsiCo brands such as Frito-Lay chips and Quaker Oats, which Marriott also buys.

One serious business decision that I’m sure was not easy, has turned into a major, long-term partnership built on a foundation far more stable than numbers – trust. Can you imagine offering significant financing to a partner who clearly was in trouble especially when you are a soda company and not a bank? I’m not recommending organizations make ill-advised or overly risky decisions in this unstable environment. But if you can help a trusted partner during this time by adding more “heart” than “head”, it might be one of the best “business decisions” you ever make.