PepsiCo Leverages Food, Beverage, Snack Synergies

Published in CSP Daily News

Forms Power of One--Americas Council, creates Global Snacks Group

John Compton

PURCHASE, N.Y. -- PepsiCo Inc. has formed the Power of One--Americas Council, which brings together its top food and beverage leaders to leverage the combined scale of the company's complementary snack and beverage businesses across North, South and Central America. The company also announced the creation of the Global Snacks Group (GSG), designed to drive breakthrough innovation across its leading portfolio of global snack food brands.

Both initiatives will be led by John Compton, CEO, PepsiCo Americas Foods, who will also retain responsibility for the company's $22 billion snack and food business in the Americas. Compton is a highly experienced leader with prior experience as CEO, PepsiCo North America; president and CEO, Quaker Tropicana Gatorade; and vice chairman and president of Frito-Lay North America.

The Power of One--Americas Council will ensure full coordination across the food and beverage operating systems, while also unlocking opportunities to create value across the business--from sales, marketing and distribution to backoffice operations. The new group will also focus on creating opportunities in complementary food and beverage products in ways that are attractive to retailers and consumers.

"The combination of our snack and beverage portfolios creates significant value for our shareholders through synergies driven by a common customer base and distribution platform, supplier leverage and shared infrastructure," said PepsiCo chairman and CEO Indra Nooyi. "The value of this combined portfolio has been greatest in our international markets, which share many activities; and we are now well positioned to realize further benefits in North America following the successful integration of our bottling business."

Compton will be joined on the Power of One--Americas Council by Al Carey, CEO of PepsiCo Americas beverages; Tom Greco, president of Frito-Lay North America; Pedro Padierna, president of PepsiCo Mexico; Olivier Weber, president of PepsiCo South America foods and Central America and Caribbean; Marc Guay, president of PepsiCo Foods Canada; Massimo d'Amore, president of the Global Beverages Group; and Luis Montoya, president of Latin America beverages.

"This strategically critical initiative will leverage the capabilities of the entire enterprise," said Nooyi. "Snack and beverage occasions are typically planned together, and the products are both purchased and consumed together. Our new Power of One--Americas Council will help us to better coordinate our manufacturing, sales and distribution activities and align our retail and consumer brand promotions across our portfolio, which will result in greater operating efficiency, speed to market and value."

The Global Snacks Group will focus on developing a coordinated approach to the company's global brand portfolio, creating and delivering breakthrough snacks innovation and promoting best practice-sharing around the world.

"The creation of the Global Snacks Group and Power of One--Americas Council are critical components of our long-term strategy to strengthen and extend our global leadership position in snacks and leverage the power of our combined food and beverage businesses," said Compton. "We believe these new initiatives will help us extend our advantage around the world."

This decision to create GSG advances the company's multi-year strategy to establish global platforms for marketing, branding and innovation. Previously, PepsiCo had announced the creation of the Global Nutrition Group and the Global Beverages Group.

The profit and loss responsibilities remain with the company's four business units--PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe and PepsiCo Asia, Middle East and Africa.

Purchase, N.Y.-based PepsiCo, with net revenues of approximately $60 billion, offers a global portfolio of billion-dollar food and beverage brands, including 19 different product lines that generate more than $1 billion in annual retail sales each. Its main businesses--Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi Cola--also make hundreds of other foods and beverages.