The Legacy Of Outgoing PepsiCo CEO Indra Nooyi

PepsiCo, Inc. PEP shares gained more than 1 percent Monday morning after the company confirmed CEO Indra Nooyi will step down Oct. 3. The 62-year-old executive has been with PepsiCo for 24 years and will remain in her position until early 2019. She will be replaced by Ramon Laguarta, the company's current president in charge of global operations, corporate strategy, public policy and government affairs.

Management Pro: 'Great Tour Of Duty'

Nooyi's legacy is one of being a "strong cultural carrier" and an "inspirational figure," Yale School of Management's Jeffrey Sonnenfeld told CNBC Monday. Her departure represents a "big loss" for PepsiCo, as she directly oversaw the creation of a new $1-billion brand "every other year," Sonnenfeld said. 

Perhaps the bigger takeaway from Nooyi's career is her leadership in offering consumers healthier options, Sonnenfeld said. Nooyi was not only among the first in the entire food business to shift away from trans fat, but to enact other societal benefits like lower carbon footprints and recycling.

Related Link: 6 Women Who've Made It Big On Wall Street

Cramer: Fixing An 'Out Of Step' Company

Nooyi transformed Pepsi, as it had a poor reputation of selling products that were "out of step with what younger people want," CNBC's Jim Cramer said Monday. The younger crowd made it clear they want to buy healthier and sustainable products, and Nooyi delivered to the point where she became the "sustainability leader not just for packaged goods but for all companies," the CNBC host said. 

What's Next?

While many in the investment community are applauding Nooyi's tenure, this shouldn't detract from the all-important question of what's next for PepsiCo.

Under the leadership of incoming CEO Laguarta, Pepsi could consider strategic changes such as potentially refranchising or spinning off its bottling business, said CNBC's Sara Eisen. Doing so could result in the company's stock being "rewarded," as has been the case with rival The Coca-Cola Co KO, she said. 

The question of whether to split Pepsi's business into separate beverage and snack companies is likely to be revisited, Eisen said. 

The conversation of PepsiCo splitting its business into a beverage and separate snack company is likely to become a conversation The topic was proposed by activist investor Nelson Peltz years ago, but was never acted on, as Nooyi proved PepsiCo is "better as one company" — and there is no indication a new CEO will bring in a different line of thought, Eisen said. 

Pepsi's beverage business has underperformed versus competitors over the past four quarters, and this will be the biggest challenge for Laguarta, Eisen said.

Related Link: All The Major Executive Departures Of 2018 — So Far

Photo courtesy of Pepsi. 

Posted In: NewsManagementMediabeveragesBloombergCNBCIndra NooyiJeffrey SonnenfeldJim CramerSara Eisensnacks
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