as well as inter-firm linkages in the value chains we are studying. Once linkages are identified between a lead firm and its suppliers, we can then begin to define the governance structure for the value chain at the global and local levels.
In this section we present our findings for five lead firms in the global food value chain: three from the food and beverage manufacturing category, and two from the fast-food category. We highlight the companies’ size, scope of activities, brands, and global expansion. The food and beverage manufacturing firms we examine are Kraft, Nestlé, and PepsiCo, and in the fast- food category, Yum! (KFC) and McDonald’s. This preliminary analysis points to the global strength of these firms and their influence on consumption patterns around the world. Moreover, a new and growing trend in the food companies’ strategies is the adoption of “healthy choice” and nutritional initiatives. Whether these programs are launched just to appease critics or whether they represent significant nutritional upgrades is a topic for future research.
In Table 1, we present brief company profiles of these firms. Yum! Brands (which includes KFC), McDonald’s, Kraft, Nestlé, and PepsiCo had combined global sales of about $320 billion in 2007. Because of different methods of reporting by the firms, this estimate is based on total sales for some firms (Yum!, McDonald’s , PepsiCo, and Nestlé) and net revenues for others (Kraft). Moreover, McDonald’s and Yum!’s figures combine company and franchise sales. These multibillion dollar corporations are engaged in global, multi-branding strategies across the world and together they employ more than 3 million workers. Yum! and McDonald’s are located in over 100 countries, while the manufacturers Nestlé, and PepsiCo are in over 200, and Kraft in over 150. For all of the corporations, international sales play a key role in their overall profitability.