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Pepsi! One emotion of a brand! From crunchy, crispy Lays, and Kurkure to the healthiest juices by Tropicana. Pepsi co-owns them all.
PepsiCo is a food and beverages company which is known to everyone. The main focus when anyone speaks of PepsiCo is how they had an Indian woman as their CEO for about 12 years.
Indra Nooyi is the very first woman CEO in the history of PepsiCo. She took over the reins as the CEO in 2006 and stepped down in 2018. In these 12 years, the net revenue of the company grew at an annual rate of 5.5%. To achieve this great success, many strategic changes were done.
A shift towards healthier foods: As a part of the company’s pledge to reduce obesity, Nooyi gave more importance to the healthier options in PepsiCo, such as promoting Tropicana Juices and Quaker oats. She expected that there would be a decline in demand for sodas and junk food. She reduced the sizes of chips packets and soda bottles, reduced the salt, sugar, and fat content, and also introduced diet brands and options for soft drinks.
Following her strategy of “Performance with a Purpose,” she classified PepsiCo’s products into three categories- ‘fun for you,’ ‘better for you,’ and ‘good for you.’ The “Fun for you” category consisted of foods like soda and potato chips. The “Better for you” category consisted of low-fat versions of the snacks and sodas. The “Good for you” category consisted of items such as oatmeal.
Indra Nooyi was most known for this strategy which is a very successful one and also left a positive impact on society and the environment.
Increased Investments in emerging markets: Nooyi made international expansion a main priority. The company made a great effort to expand its distribution and increase sales by targeting the middle class in developing countries. About 21% of PepsiCo’s net revenue comes from Asia, North America, the Middle East, and Latin America.
PepsiCo established a strong base in India and had planned to invest about $5.5 billion by 2020, directly taking on Coca-Cola for the top spot in the market.
The Frito Lay unit expansion: eventually, the drinks and sodas seemed less important as their focus was now on the healthier products which command a higher premium than the usual ones. The Frito Lay unit comprises about 46% of the company’s operating profit and around a quarter of its sales. Brands like Doritos, and Lays have helped the unit become a global leader in the snacks market and have about 66% share in the domestic market. Frito Lay has become PepsiCo’s most valuable product segment.
Indra Nooyi has not only implemented her strategies in developing the products but also in leading the employees.
Leading the employees: Nooyi says that employees want to do better but they can’t if their managers are not giving them the right knowledge and resources to improve. Nooyi asked employees to assess their managers annually to identify the weak points not only within the management but also within the company as a whole, as weak managers lead weak teams. Nooyi realized that to empower the teams, the managers must be given proper education and resources. For that matter, PepsiCo has implemented a training program for first-time managers to help them become teachers and achieve team success.
Make talent the company’s biggest asset: Nooyi says that HR professionals should think of themselves as a talent agency where the talent itself is the company’s biggest asset. One of the important factors in growing and encouraging talent is to put aside all of the demographics or backgrounds. Nooyi believes that if they go gender blind or background blind and pick the best and brightest, they’ll, for sure, end up with a different workforce. Many leadership candidates lack the perspective that comes from developing talent to achieve strategic business results and this perspective is what makes a business successful.
On August 6, 2018, Indra Nooyi stepped down as the CEO after serving a tenure of 12 years which is 7 years more than any CEO. She continued to serve as the chairman of the company until early 2019, however. She has consistently ranked among the world’s 100 most powerful women and was ranked the second most powerful woman on the Fortune list in 2015 and 2017.
--- Jayasri
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