PepsiCo


In 2005, after a century of being #2, PepsiCo surpassed Coca-Cola in market value. Although in the last few years Coca-Cola has gained significant international market share in carbonated drinks in emerging markets, PepsiCo is now two-thirds a food business and one-third a drinks producer. The company has also committed to remove its drinks with high-sugar content from primary and secondary schools worldwide by 2012 and, since 2006, has adopted voluntary guidelines to replace ‘full calorie’ products with ‘lower calorie’ alternatives and is ‘one of the top two health and wellness companies in the world.’ The aim is to have $30 billion ‘good for you’ product sales by 2020. In achieving this ambition, by 2020 PepsiCo sees that its ‘business will be based on delivering fruit, vegetables, wholegrain, and fiber.’

PepsiCo is the world’s third-largest food and drink company. No longer just Pepsi, it includes other major food and drink brands including Tropicana, Quaker, Lay’s/Walkers, and Gatorade. In all, very much like Nestlé, it has around 20 $1 billion brands that are sold in over 200 countries worldwide. What makes PepsiCo so well regarded in the sector is that over the past decade it has substantially changed its product portfolio. Ahead of most of its peers, PepsiCo saw the obesity epidemic on the horizon and recognized the need to change. Most significantly, rather than exiting the category, as it had previously done with fast-food restaurants such as Pizza Hut, Taco Bell, and KFC, it chose to change its product portfolio and move towards a healthier product mix. This has been a gradual process but one that over the past five years has had significant impact. It has involved a new focus for the company – ‘performance with purpose’ – and has also incorporated a splitting of its portfolio into three categories – ‘fun for you,’ ‘better for you,’ and ‘good for you.’

PepsiCo is delivering growth based on a clear ambition, sense of purpose and set of targets around financial growth and product and portfolio changes. As with other Growth Champions it is balancing the drive for global standardisation with the need to recognise local differences. It provides a leading example of how to translate beliefs around the importance of sustainability and nutrition into practical decisions and actions across the business in a way that does not lose sight of the need for customers to engage with products that are ‘authentic, affordable and available’.

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