Blog: Dean BestWhat does PepsiCo's "review" mean for its health ambitions?

Dean Best | 9 February 2012

So, now we know. After six months of fevered speculation, which included talk that the company could split in two, PepsiCo has outlined the detail of its wide-ranging review of the business designed to put some fizz back into the food and beverage giant.

Investment in marketing, cost cuts, a streamlining of management - but, notably, no plans to divide in two, as some analysts had urged.

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.

However, as I argued at the height of the speculation around the company, it would be folly to let that frustration dictate a demand for a split. For one, there is a robust rationale for having soft drinks and snacks in the same portfolio - not least in the pricing power it can give the company over its retail customers. Furthermore, Nooyi's strategy to expand PepsiCo into healthier categories is sound and takes in both snacks and soft drinks; consumer demand for healthier products is a long-term trend that has withstood the downturn and shows little sign of abating.

That said, it will be interesting to hear whether PepsiCo's new "strategic priorities" will lead to the company pulling back from investment in categories like dairy, at least in the short term.

just-food's new news editor Michelle Russell is on the line to New York now, tuning in to the press conference on PepsiCo's strategy.

Stay tuned to just-food for more in the coming hours.


BLOG

Will Amazon Go be retail "game-changer"?

Ask any FMCG executive to list the trends shaking up the sector and digital and e-commerce will be pretty high on the list. Drill down into that and Amazon will be one of the subjects in the digital s...

BLOG

UK food producers call for "best possible single market access" post-Brexit

Since Theresa May took over as UK Prime Minister in the wake of the country's referendum vote to quit the European Union, she and her ministers have been at pains not to divulge their negotiating posi...

BLOG

Greenpeace trains sights on Sainsbury's over John West tuna

Greenpeace's long-running campaign against UK tuna brand John West, owned by seafood giant Thai Union, is now directing its fire against Sainsbury's....

just-food homepage



Forgot your password?