After its latest round of restructuring, the firm said its Global Snacks Group will focus on developing a coordinated approach to the company’s global snacks portfolio, delivering innovation and promoting ‘best practice sharing’ around the world.
However, the multinational owner of brands such as Lay’s, Sunchips, Walkers and Doritos is quick to emphasise that the new innovation platform will not replace its existing R&D infrastructure.
“We currently have a globally integrated R&D organization that supports our business units. This hasn’t changed,” Jeff Dahncke, senior communications director at PepsiCo, told BakeryAndSnacks.com today. “The decision to create the Global Snacks Group advances the company's multi-year strategy to establish global platforms for marketing, branding and innovation (we have previously announced a Global Beverages Group and Global Nutrition Group).”
Nor does it mean that innovations will automatically be rolled out on a global scale.
“It means the new group will focus on establishing global platforms for marketing, branding and innovation that can be leveraged by our business units when and where it makes sense,” he said.
Joined up approach to snacks and beverages
The multinational has also formed the Power of One – Americas Council to better coordinate manufacturing, sales and distribution activities and align retailer and consumer brand promotions for its Americas beverage and snacks portfolios. Its reasoning is that snack and beverage occasions are typically planned together, and the products are both purchased and consumed together.
PepsiCo says a combined approach will “result in greater operating efficiency, speed to market and value”.
However, Dahncke denies that it is a cost-efficiency exercise, saying: “This is a strategic business initiative that will combine the global strength of PepsiCo’s food and beverage businesses in new ways that are attractive to retailers and consumers.”
Last year PepsiCo acquired its North American bottling operations Pepsi Bottling Group and PepsiAmericas. The bottling operations are now an operating unit of PepsiCo known as Pepsi Beverages Company. Now that these businesses have been fully integrated, PepsiCo believes the timing is right to align its beverage and snacks businesses.
“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 in a statement. “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.”
Both initiatives will be led by John Compton, CEO, PepsiCo Americas Foods, who will also retain responsibility for the company’s $22bn snack and food business in the Americas.