Is Pepsi Stock Halal?

May 20, 2022

Table of Contents

Key Points

After examining Pepsi’s source of revenue, the ratio of interest expense to total operating expense, and ESG impact we are uncomfortable investing in Pepsi from a Halal perspective.

Company Overview

PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase.

PepsiCo’s business encompasses all aspects of the food and beverage market. It oversees the manufacturing, distribution, and marketing of its products.

How much of Pepsi’s revenue comes from haram?

While the majority of Pepsi’s products are halal, Pepsi recently partnered with Mountain Dew and started selling Alcoholic beverages.

Practical Islamic finance concludes

It’s unclear how much of Pepsi’s revenue comes from alcoholic beverages although we would not be surprised if this portion grew with time since Pepsi is relatively new in this space. This recent disposition of Pepsi with regards to alcoholic beverages, while not conclusively material, is cause for concern.

Does Pepsi rely on interest to operate?

	Recent Quarter ended 3/19/2022	Fiscal Year ended 12/25/2021	Fiscal Year ended 12/25/2020
Interest Expense	240	1,863	1,128
Total Operating Expense	6822	31,237	28,495
Interest Expense / Total Operating Expense	3.52%	5.96%	3.96%

*Numbers in millions, of U.S. dollars

Practical Islamic finance concludes:

Riba is used but not relied upon in Pepsi’s operations.

What is Pepsi’s Environmental, Social, and Governance (ESG) impact?

Environment

Globally, as of 2020, nearly 87 percent of Pepsi’s direct-crop volume has been verified as sustainable, including 100 percent of the volume sourced from 28 countries. Pepsi is aiming to achieve net-zero emissions by 2040.

Social

Pepsi has a Glassdoor rating of 3.9 out of 5.0. Glassdoor is a trusted website where current and former employees can review and rate their companies.