Pepsi Reorganizes Executive Line-Up
Apparently, PepsiCo (NYSE: PEP) is losing patience fast with CEO Indra Nooyi. The second biggest soda beverage company is shuffling the format of its top management team amid concerns about it should split its snacks and soda businesses.
According to Forbes, PEP is bringing in a familiar face to help out. Former Wal-Mart (NYSE: WMT) executive Brian Cornell will rejoin Pepsi to run the America's Food division, including staples like Lays chips and Doritos. Current U.S. food chief will become president, the first for Pepsi.
Cornell previously ran the Tropicana brand for PEP, as well as beverage operations in Europe and Africa. He will now manage the company's most profitable division.
New president Compton's responsibilities will include uniting the various Pepsi divisions, as well as building the company's brand in the U.S. and abroad.
Nooyi is taking the flak from investors but she's taking it all on the chin, saying in a statement that, “Today marks an important and essential step in PepsiCo's journey to continue to deliver sustainable growth. John and Brian are superb executives and will both contribute enormously in their new roles to ensure that we compete effectively and efficiently in the global marketplace.”
Still, Nooyi would do well to watch her back. The company remains second in the soda market, while the stock has advanced just 0.5% in the past five years.
For now, she will move forward with the plan outlined last month, which includes a 3% workforce reduction and pumping $500 million into marketing the core brands.
On February 29, Nooyi spoke at a consumer analyst group, saying that PepsiCo is well positioned, generating $66 billion in annual revenue making it the second largest food and beverage company worldwide. More importantly it has strong margins and returns.
“Our business is well balanced both geographically and by product category. Today, over a third of our portfolio is fast-growing and emerging markets and we are roughly evenly balanced between snacks and beverages. Over the next ten years, we expect the portfolio to continue to shift [more] to the faster growth markets reaching about 5050 between emerging and developing and developed markets over the next decade. And we also think over this period that the snack business will become a bigger part of the portfolio.”
Compton called Pepsi co the undisputed leader in macro snacks, larger than Kraft and almost double the size of its nearest competitor. “Globally, our volume grew 4% and our revenues grew 9%. This is on an organic basis, excluding the impact of [Wimbledon] and the Quaker foods warehouse business. And importantly globally we grew value share. You know our developed markets grew low to mid single digits has been our guidance in the past.”
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