PepsiCo CFO: It's Integration Of Food And Beverage Business That's Allowing Us To Play At Top-Tier

PepsiCo, Inc. PEP came out with better than expected fourth-quarter earnings today and also increased its annual dividend by 7.3p. Hugh Johnson, PepsiCo CFO, was on CNBC post the results to break down the results and discuss the growth of company’s beverage business.

Great Momentum

“It was a terrific quarter for us and really coming off after a terrific 2014,” Johnson said. “Three big messages here, number one PepsiCo is delivering, you see that in numbers both in the quarter and in the year as we [raised] guidance over the course of the year, behind that though is PepsiCo really does have a lot of momentum both in terms of our large customers and our small customers and the business is performing really well right now.”

He continued, “One interesting fact in that regard, we generated in the U.S. about a billion dollars of sales growth for our customers, it took the next 27 customers to get to the next billion of growth and that’s why Wal-Mart named us Supplier Of The Year in large format and in small format, the biggest customer 7-Eleven also named us Supplier Of The Year. So, we really do have great momentum and perhaps most compellingly for investors we are doing it the right way, our innovation is terrific.”

Investors Are Concerned That It’s Frito-lay That’s Driving PepsiCo Numbers Not The Beverage Business?

“Overall beverages are doing really well right now, not just in North America, but around the globe,” Johnson replied. “If you look at the performance of North America beverage, 3p revenue growth, 11p operating profit growth. It seems to me that business is performing quite well right now really at an industry leading level importantly both in the U.S. and Internationally, it’s the integration of food and beverage portfolio that’s allowing us to really play at the top-tier I think of CPG company performance right now.”