PepsiCo CEO Indra Nooyi to step down
Nooyi has been with PepsiCo for 24 years, with the last 12 as CEO. She will step down on October 3, although remain chairman until early 2019 to ensure a smooth transition.
Under her leadership, PepsiCo has seen net revenue growth from $35bn in 2006 to $63.5bn in 2017: a compound annual growth rate of 5.5%. She also led the acquisition of Tropicana and merger with Quaker Oats, bringing the Quaker and Gatorade businesses to PepsiCo, as well as the acquisition of Wimm-Bill-Dann, the largest international acquisition in PepsiCo’s history.
The second most powerful businesswoman
PepsiCo's top brands include Frito-Lay, Pepsi-Cola, Quaker, Gatorade and Tropicana; and its portfolio includes 22 billion-dollar brands.
'Leading PepsiCo has truly been the honor of my lifetime'
Nooyi was named as Fortune’s second most powerful woman in business last year, coming after chairman and CEO of General Motors, Mary Barra.
Fortune credits Nooyi with moving PepsiCo’s portfolio towards healthier fare: and PepsiCo has grown its portfolio of ‘Good for You’ and ‘Better for You’ options from about 38% of revenue in 2006 to roughly 50% in 2017.
Nooyi, 62, said: "Leading PepsiCo has truly been the honor of my lifetime, and I'm incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve.
"Growing up in India, I never imagined I'd have the opportunity to lead such an extraordinary company. Guided by our philosophy of Performance with Purpose — delivering sustained performance while making more nutritious products, limiting our environmental footprint and lifting up all the communities we serve — we've made a more meaningful impact in people's lives than I ever dreamed possible.
"PepsiCo today is in a strong position for continued growth with its brightest days still ahead."
Ian Cook, presiding director on PepsiCo’s Board of Directors, said: “Indra has provided outstanding leadership over the past 12 years, serving as a model both within our industry and beyond for responsible corporate stewardship in the 21st century.
"She has delivered strong and consistent financial performance, managing with an eye toward not only the short-run, but the long-run as well. As CEO, she grew revenue more than 80%, outperforming our peers and adding a new billion-dollar brand almost every other year. And shareholders have benefited: $1,000 invested in PepsiCo in 2006 is worth more than two-and-a-half times that amount today.
"Thanks to her leadership, PepsiCo is well positioned for ongoing success as Ramon assumes this new role.”
Having spent 22 years with the company to date, Barcelona native Laguarta will become the sixth CEO in PepsiCo's 53-year history.
He became president of PepsiCo in September last year, overseeing global operations, corporate strategy, public policy and government affairs. Prior to this, he was CEO for the Europe Sub-Saharan Africa division, and his role before that was as president for the Eastern Europe Region.
Before joining PepsiCo, Laguarta worked for confectionery company Chupa Chups in Spain.
The rest of PepsiCo’s senior leadership team remains unchanged.
Analysts' views: 'Nooyi has been an exemplary CEO'
Neil Saunders, managing director, GlobalData, says that Nooyi's 'smart thinking and sound vision' has been key to PepsiCo's success. He credits her work in building up the company's snack portfolio as being particularly important in balancing out the pressure on soda and diversifying the portfolio.
"Over the past 5 years, the market for CPG goods has been extremely challenging, especially for the larger players. Many have seen market share fall and their revenue and profits suffer. However, Indra Nooyi has managed to steer PepsiCo through the turbulent waters and, when she steps down, will leave a company stronger than the one she inherited 12 years ago," he said.
"As much as the departure of Ms. Nooyi is a loss for PepsiCo, she leaves behind a strong team and a clear vision. These should serve the company well in the years ahead. Her successor, Ramon Laguarta is also well versed in PepsiCo and has direct experience of areas such as corporate strategy and overseas expansion - both of which will be vital to the firm's continued success."
Laguarta 'more than capable to lead PepsiCo'
Meanwhile, Bonnie Herzog, analyst at Wells Fargo Securities, says Nooyi has set the bar high.
"We have had the privilege of knowing Indra Nooyi for over a decade and have been very impressed with her leadership acumen and very thoughtful approach to managing the company through what has been a period of very choppy waters for broader CPG," she said.
"Nooyi has been an exemplary CEO and sets the bar high, in our view. That being said, we are confident that Ramon Laguarta is more than capable to lead PepsiCo into its next generation of success.
"We were encouraged that PepsiCo once again chose to look internally for its CEO candidate, and believe that the decision to promote an insider illustrates the company's strong bench of internal talent and long-term focus on succession planning."