PepsiCo CEO: It’s a Noncarb World

Nooyi’s message: “Focusing just on CSDs is a thing of the past”

By 
Steve Holtz, Editor in Chief, CSP Daily News

pepsi portfolio

PURCHASE, N.Y. -- She does a good job of hiding the exasperation in her voice, but it’s clear PepsiCo’s CEO Indra Nooyi is getting tired of defending carbonated soft drinks. In fact, she doesn’t; instead she argues for a new way of looking at the beverage business.

“Focusing just on CSDs is a thing of the past,” she said during an earnings conference call this past week when asked to discuss Pepsi’s carbonated-soft-drink (CSD) brands losing share.

“In the case of CSDs, there’s been a small share loss,” she said, “but if you look across the portfolio, Mountain Dew is doing exceedingly well, we’re doing very well in small-format, and we’ve really been working the portfolio to make sure that channel management, price-pack management, trade management, innovation management and overall portfolio management works to deliver overall LRB (liquid refreshment beverages) share increase. And that’s really what we’re focused on.”

In other words, don’t think of PepsiCo’s North America Beverages arm, which grew its volume by 3% and its revenue by 5% during the third quarter, as just CSDs. It’s also bottled water, ready-to-drink tea and coffee, sports drinks and more.

“The portfolio is working right now; that’s the most important thing,” Nooyi said. “In a marketplace that’s shifting more toward [noncarbonated beverages], we’ve got to make sure that we step up our investment in noncarbs, our innovation in noncarbs, which is really what we’ve been doing.”

Her bottom-line message?

“I would strongly suggest everyone look at total LRB because that’s the right way to look at the market going forward.”

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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