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

Asda boss reacts to UK watchdog's stance on Sainsbury's deal

Sainsbury's chief Mike Coupe took to the airwaves within minutes of the CMA's provisional findings being announced and, today (21 February), his partner on the proposed merger at Asda gave his verdict...

BLOG

Which M&A advisory firms topped the charts in 2018?

Run-downs of the top financial and legal M&A advisers for the consumer sector in 2018 have been published....

BLOG

Seeing the palm oil for the trees

Ocado has set up an ‘aisle’ on its website displaying products that do not contain palm oil, in response, the UK online grocer says, to growing interest from consumers in the ingredient....



Forgot your password?