From Brazilian Bureaucracy to Guatemalan Highways: Behind the Scenes of PepsiCo's Logistics in Latin America

The multinational invests heavily to ensure logistics efficiency in a region marked by regulatory hurdles and limited infrastructure — in Brazil alone, the food sector occupies 10.5% of logistics warehouses

Leandro Rovai, Global Head of Knowledge Management in Real Estate at PepsiCo

By: SiiLA News

05/26/2025

In Brazil, the Food, Beverage & Tobacco sector accounts for 10.5% of the industrial properties market share. Handling sensitive cargo like food products, the sector faces specific operational challenges — but according to PepsiCo, one of the main barriers lies in the real estate market itself.

Leandro Rovai, Global Head of Knowledge Management for Real Estate at PepsiCo, says the key issues are complex regulatory environments, inadequate infrastructure, and the need for guarantees to support sustainable operations.

“One of the biggest hurdles multinational companies face in Latin America is the complex regulatory environment. Each country has its own set of laws and regulations governing real estate development, which can make the process difficult to navigate,” Rovai explains.

In Brazil, for example, bureaucracy is a major issue. Beyond the difficulties in obtaining licenses and permits, there’s legal uncertainty stemming from overlapping responsibilities across municipal, state, and federal agencies.

Rovai also points to Brazil’s high tax burden, political instability, and frequent changes to financing and incentive rules as major challenges.

According to the company's 2024 annual report, Brazil is listed alongside Argentina and Mexico as a country with operational risks due to political, economic, and social volatility or geopolitical conditions.

Despite these obstacles — which are not exclusive to Brazil — Latin America generated US$11.7 billion in net revenue for PepsiCo in 2023, with operations in 34 countries and over 40 production facilities. Globally, it was US$91 billion.

Even so, the Brazilian Food Industry Association (ABIA) reports that the food and beverage sector moved R$410.3 billion in domestic market revenue in 2024.

Infrastructure

Beyond regulatory challenges, infrastructure remains a key bottleneck across Latin America. Many countries still lack the capacity to support high-standard real estate projects. Common issues include poorly maintained roads, inconsistent power supply, and limited water access.

Rovai highlights Guatemala as a key case study.

“A striking example is PepsiCo’s distribution center in Villa Nueva, Guatemala, strategically located southwest of Guatemala City due to its proximity to major highways, which supports regional logistics and distribution. However, substantial investment was needed to bring local infrastructure up to PepsiCo’s standards. The company modernized the facility and implemented advanced logistics systems, such as voice-directed picking and 29 loading docks to optimize goods flow. These upgrades were essential to achieve operational efficiency and meet market demand, although they required rigorous planning and significant financial resources,” he recalls.

A similar example can be found in Puebla, Mexico, where PepsiCo built 29 distribution centers and 15 Product Exchange Centers (PECs) to serve the country’s central and southeastern regions. According to data from SiiLA's Market Analytics, the company occupies 421,000 m² in Latin America.

In Brazil, PepsiCo occupies 78,100 m² across class A+, A, and B industrial properties nationwide, according to SiiLA.

Read more: When Protectionism Hits the Ground: Latin America’s Industrial Market Under Pressure

Economy

Economic instability remains one of the main barriers for multinationals operating in Latin America. Currency fluctuations, persistent inflation, and political noise have complicated investment decisions — including in real estate.

In Brazil, this translates into high interest rates — currently at 14.75% — making credit more expensive and limiting financing options, particularly for middle- and lower-income populations. Rising construction costs, driven by the INCC index, have also pushed developers to delay new launches and prioritize the completion of ongoing projects.

Rovai says the current situation in Brazil is not new to PepsiCo. In Guatemala, the company faced similar challenges between 2019 and 2020 during the construction of its distribution center.

“The US$27 million investment required strict financial planning and risk mitigation strategies. Economic volatility can directly impact construction costs, labor expenses, and overall project feasibility. That’s why companies must be prepared to adapt quickly to shifts in the macroeconomic environment,” he explains.

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