Blog: We remained focused on healthier categories, says PepsiCo's Nooyi
Michelle Russell | 10 February 2012
PepsiCo's CEO Indra Nooyi had the tough task of fielding questions yesterday (9 February), following the results of a review that outlined a series of plans to revitalise the business, including more investment in advertising, a streamlining of the company's management and a raft of job cuts.
Speaking on the analyst call following the release of the review and its earnings figures, Nooyi was asked about the possibility of revisiting the idea of a split, given months of speculation about the future direction of PepsiCo. Analysts have agitated for the business to split in two to generate more value for the shareholders.
At the core of analyst and investor unrest over PepsiCo's recent performance was that its focus on driving sales of healthier products had meant it had been distracted from its core soft drink and snacks operations
Nooyi, however, dismissed any suggestion that PepsiCo might revisit the idea of splitting the business if the review did not have the desired results, and attempted to outline the importance of both divisions to analysts.
"We compete in categories with attractive growth, margins and returns, whether it's snacks, beverages or the nutritional category, because all of these categories have global growth of 5% or more," Nooyi said. "The really good news is we have a balanced portfolio, both geographically and in terms of the categories and the consumer needs and occasions that we service."
While Nooyi avoided directly answering the question over whether PepsiCo had overly focused on health and nutrition to the detriment of the firm's North America CSD unit, she did say that the good-for-you business had received the "least amount of investment" to date.
"We are working across the whole spectrum. This is an 'and' game and not an 'or' game," she said.
A spokesperson for PepsiCo told just-food today that PepsiCo knows it has to focus both on "growing our core brands like Pepsi and Lays as well as expanding our health and wellness portfolio with brands like Tropicana and Quaker".
"That’s what we have done and will continue to do," the spokesperson said.
"[Health and wellness] has been a driver of our business for a long time, and all we've been talking about is accelerating growth in those businesses. We obviously want to maximise growth opportunities in all of our businesses."
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