Switching to healthy products worked well for PepsiCo: Indra Nooyi

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Indra Nooyi, Chairman and CEO of PepsiCo, laughs during a session at the annual meeting of the World Economic Forum (WEF) in Davos. (Reuters) Indra Nooyi, Chairman and CEO of PepsiCo, laughs during a session at the annual meeting of the World Economic Forum (WEF) in Davos. (Reuters)
SummaryPepsiCo decided to transform its portfolio from ‘fun-filled’ to ‘good-filled’ products

With consumers going the healthy way, PepsiCo decided to transform its portfolio from ‘fun-filled’ to ‘good-filled’ products, the beverages major’s chief Indra Nooyi said Friday. The transformation has worked well for business and many healthier products are giving good margins, Nooyi said at the World Economic Forum (WEF) annual meeting.

Nooyi is the chairman and CEO of PepsiCo.

Speaking about the transformation that PepsiCo has gone through, she said it was a portfolio of fun-filled products earlier, but when "we looked at the eating and drinking habits of people, we realised there was a need to have healthier products and good-for-you products".

"Then we realised we cannot tell the customers that healthier products would cost more and may be tasteless. So, we adopted a strategy and that transformation worked well," she added.

Nooyi also spoke about geographic transformation.

"When we wanted to expand into emerging markets, we went for acquisitions. There has been a normal cycle that when we make the acquisition it looks expensive, but few years down the lane it becomes attractive," she said.

According to her, the company also realised that it needs to work with communities in the countries where it operates.

"All this was not just for corporate social responsibility, but also because we wanted to make money in a different and more responsible way" "Now overseas transfers at our base in US are not about London, Paris and Geneva, it is about Africa, Asia and

other emerging markets," Nooyi said.

Some of PepsiCo's healthier products are giving very good margins, because the company has tried to change its fun-filled products into healthy products or "good-filled products",

she said.

Noting that the world is changing, Nooyi said the 'big transformation' has happened.

"For example in India, we are doing local breakfasts with Quaker oats in India and we have huge plans for Africa... we have got the core platform for further transformation," the PepsiCo chief said.

Between shareholders and customers, she said it was difficult to decide who is more important.

However, she said that now it is about stakeholders rather than only shareholders. These stakeholders include customers, suppliers as well as everyone with whom the company deals.

"I also think the challenge for a CEO is to manage the duration of the returns along with the level of returns. It is not good to focus only on getting a very high level of returns," Nooyi said.

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