After Ukraine's invasion, PepsiCo, Coca-Cola, McDonald's, and Starbucks announced Tuesday they will suspend operations in Russia, a symbolic move by four iconic U.S. brands. Pepsi has been selling its beverages in Russia for more than six decades, even when the company had to trade its soda concentrate for Stolichnaya vodka and warships. Just months before the Soviet Union fell, McDonald's opened its first branch outside the Iron Curtain in Moscow. Pepsi, Coke, McDonald's, and Starbucks have come under fire for continuing to operate in Russia, while other U.S. companies have suspended operations and suspended sales.
Yale Professor Jeffrey Sonnenfeld compiled and released a list of U.S. companies that have withdrawn from Russia following President Vladimir Putin's invasion -- and those that have not. Coke was one of the most well-known names on the spreadsheet until Tuesday afternoon. Coke said in a brief statement Tuesday afternoon that its hearts are with the people who are suffering unconscionable effects from these tragic events in Ukraine. "We will continue to monitor and evaluate the situation as circumstances change." Coke’s direct rival PepsiCo is more dominant in Russia, which was named one of the world’s top five food markets in a regulatory filing by Coke. Coke said that its business in Ukraine and Russia will account for 1% to 2% of its consolidated net operating revenue and operating income in 2021. Pepsi, on the other hand, makes up 4% of its annual revenue in Russia, though it will not scale back on business in that country.
The company said it will continue to sell certain essential items, like baby formula, milk, and baby food. Pepsi-Cola, 7UP, and Mirinda brands, as well as capital investments, advertising, and promotional activities, will be banned from selling in Russia, according to a memo to employees seen by CNBC. The Wall Street Journal reported earlier on Tuesday that Pepsi was weighing different options for its Russian business, including selling off its value. Economic sanctions have made the process of selling off Russian assets extremely difficult.