Q: Why haven't my shares of PepsiCo Inc. continued upward this year as usual? — F.W., via the Internet

A: Rising commodity costs and declining domestic sales of carbonated drinks are challenges for the global beverage and food producer.

Items such as wheat, milk, oranges, corn, sugar and energy are expected to cost six percent more this year, the company projects. Meanwhile, its US soft-drink volume declined 2.7 percent last year, the same as rival Coca-Cola Co., according to industry publication Beverage Digest.

PepsiCo (PEP) shares are down five percent this year following last year's 21 percent advance, and gains of six percent in 2006 and 13 percent in 2005. The company plans to buy back $4.3 billion of its stock this year.

The sweeter long-term view is the fact that PepsiCo has been able to raise prices and possesses 16 global brands with sales of more than $1 billion. Its Frito-Lay subsidiary is the world's biggest snack-foods company.

Although ranking second to Coke in soft drinks globally, it is the leader in non-carbonated beverages in most markets in which it competes. International growth is the company's driver, with Asia Pacific volume growth especially robust.

PepsiCo and its largest bottler, Pepsi Bottling Group Inc., are purchasing 75 percent of Russia's largest juice producer, JSC Lebedyansky, for $1.4 billion. PepsiCo spent $1.3 billion on acquisitions last year, including Bluebird snacks in New Zealand and Naked Juice in the US.

The innovative company is constantly introducing new products, such as its Tropicana Pure Valencia high-end juices, low-sodium Lay's chips and low-calorie G2 Gatorade.

Consensus Wall Street recommendation on PepsiCo shares is a "buy", according to Thomson Financial, consisting of four "strong buys", seven "buys" and four "holds."

Chief executive Indra Nooyi has become a business celebrity since receiving the top spot in October 2006. She was previously instrumental in strategic development at PepsiCo. Her game plan is innovation around core products, plus inroads into health and wellness products.

Nooyi's 2007 salary was $1.3 million, a 35-percent increase over 2006, according to a filing with the Securities and Exchange Commission. She became board chair in May 2007.

PepsiCo earnings are expected to rise 10 percent this year and 11 percent next year, according to Thomson. The projected five-year annualised increase also is forecast as 11 percent.