PepsiCo Announces New Healthy Products

PepsiCo has announced its plans to launch healthier products next year and focus on growth in emerging markets. This will be in continuation of the strategy that has helped the world’s No 2 beverage company stay profitable even as sales growth of its soft drinks has slowed.

According to PepsiCo’s new CEO Indra Nooyi, the company is on right track to meet its annual target of volume and revenue growth in the mid-single digits and earnings per share growth in the low double digits. Speaking at an analysts’ conference in New York on October 23, Nooyi said she would lead the company without a major departure from the strategy of her predecessor Steve Reinemund, who will retire in May. Nooyi added that she has been involved in the company’s strategic planning for the last several years and a radical shift in the strategy is not going to happen.

Under Reinemund’s guidance, PepsiCo evolved into a $33-billion food company from being known mostly for selling soda and salty snacks. The company embraced the push into healthier options like Tropicana juices, Aquafina water and whole grain Quaker Oats Cereals while seeing earnings rise.

PepsiCo has fixed its targets for midteen-range profit growth in the international unit and 7% growth in the North America unit. Nooyi said that health and wellness, natural and organic products and premium products are the areas ripe for growth in North America. Mike White, CEO PepsiCo International, said concerns about health are global and because of the growing concerns about obesity, they were not pushing international consumers to increase the serving size of their salty snacks, but to just eat them more frequently. CFO Richard Goodman said that PepsiCo would allocate $500 million a year for tuck-in acquisitions as part of an aggressive expansion strategy. Some analysts feel there will be more focus on acquisitions in the near future.