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

Nature's Path quits US organic trade body in "protest"

The Organic Trade Association, which represents the organic industry in the US, has seen a high-profile member quit the organisation, taking a swipe at the body's stance on policy issues....

BLOG

Early skirmishes in the Ketchup War

In the 1970s a squabble between the UK and Iceland over fishing rights in the North Atlantic earned the somewhat hyperbolic name of the Cod War....

BLOG

Brexit could be worse for dairy than Russia ban, EU and UK producers warn

Russia's embargo on a swathe of foodstuffs from the EU in 2014 - a ban that lasts to this day - hammered the bloc's dairy industry. But producers on both sides of the English Channel have warned the i...

BLOG

Plenty of hot air as UK politicians grill Asda, Sainsbury's over merger

UK Parliamentary select committees at their best are meant to bring light rather than generate heat but this wasn't a select committee at its best....



Forgot your password?