Eric J. Foss, current chairman and CEO of PBG, the world's largest bottler of PepsiCo beverages, will become CEO of the new bottling unit, reporting to PepsiCo chairman and CEO Indra Nooyi.
PBNA will comprise all current PBG [image-nocss] and PAS operations in the United States, Canada and Mexico, and will account for about three-quarters of the volume of PepsiCo's North American bottling system, with independent franchisees accounting for the rest. It will focus on integrating the two bottling businesses. PBNA will be separate from the brand-oriented PepsiCo Americas Beverages (PAB) unit, which will continue to oversee independent bottlers and Gatorade and Tropicana operations. The separation will allow greater focus for both units and enable PBNA to continue producing and distributing "allied brands" not owned by PepsiCo.
Current PBG and PAS operations in Europe and Russia will be managed by PepsiCo Europe when the mergers are completed.
"This structure will provide two very important benefits," Nooyi said. "It will allow us to continue the critically important work we began last year to refresh our core soft drink brands. At the same time, it will enable us to maintain the operating focus we need to capture the strategic opportunity created by our bottler mergers, particularly in North America."
She added, "This new beverage model will strengthen our position in the global beverage marketplace through a powerful combination of scale, speed, flexibility and efficiency."
Said Foss, "Our focus will be to create a bigger, stronger and faster organization that can better serve our customers and accelerate our growth in North America. I am eager to work with the talented people across PAS, PBG and PepsiCo to reenergize our beverage business, drive profitable growth for our customers and sustain a high performance and compelling environment for our people. It is great to re-join the PepsiCo team, and I look forward to accelerating our potential to become a more unified and integrated beverage system."
In order to facilitate a smooth integration of the bottling businesses, PepsiCo will establish a special advisory board. Among its members will be Foss; Nooyi; Robert Pohlad, chairman and CEO of PepsiAmericas; and Craig Weatherup, founding chairman and CEO of The Pepsi Bottling Group, who retired in 2003. Prior to his PBG tenure, Weatherup served as CEO of The Pepsi-Cola Co. and president of PepsiCo.
"This advisory board, as well as Eric's leadership of PBNA, brings stability, strong leadership and valuable continuity as we work to bring the businesses together seamlessly and smoothly," Nooyi said.
Upon completion of the mergers, which require regulatory and shareholder approval, PepsiCo will have five direct reports to Nooyi from an operating standpoint. In addition to Foss of PBNA, they will include Massimo d'Amore, PepsiCo Americas Beverages CEO (PAB), John Compton, PepsiCo Americas Foods CEO (PAF); Saad Abdul-Latif, PepsiCo Asia, Middle East and Africa CEO (AMEA); and Zein Abdalla, PepsiCo Europe CEO.
As chairman and CEO of The Pepsi Bottling Group, Foss currently leads an independent company that generated nearly $14 billion in revenues in 2008. PBG operates in the United States, Canada, Greece, Mexico, Russia, Spain and Turkey, accounting for more than one-half of the Pepsi-Cola beverages sold in North America, and about 40% of the Pepsi-Cola system volume worldwide. He was named CEO and elected to the PBG board in July 2006 and elevated to chairman in October 2008. He served as COO from September 2005 to July 2006.
Foss joined Pepsi-Cola Co. in 1982 and held a variety of field and headquarters sales, marketing and general management positions in the United States and Europe.
With more than $43 billion in 2008 revenues, Purchase, N.Y.-based PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 18 different product lines that each generate more than $1 billion in annual retail sales. Its main businesses are Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade.
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