PepsiCo, WhiteWave Moving in Opposite Directions

By Dave Fusaro, Editor in Chief

Feb 18, 2016

The perils of being global were apparent on day three of the Consumer Analysts Group of New York (CAGNY) conference. The worsening global economy hit PepsiCo hard in 2015, while WhiteWave Foods, with less international exposure (but one hiccup in China), continues an advantaged run. Coincidentally, the two companies were our 2015 and 2014 Processors of the Year.

Read our day-one CAGNY story here, and our day two story is here.

PepsiCo

Against a Powerpoint that showed a boat navigating a stormy sea, PepsiCo Chairman and CEO Indra Nooyi said, "We are performing as we are transforming." That became the theme for the PepsiCo presentation to the financial analysts.

Both sales and income were down in 2015. Sales retreated to $63 billion (from nearly $67 billion in 2014) and income was off by a billion dollars, to $5.5 billion. North American revenue held up well, with Frito-Lay showing a small gain and the Quaker and Beverages businesses about flat. Europe and sub-Saharan Africa sales were off by $3 billion, Latin American sales down $1.2 billion and Asia/Middle East/North Africa fell by $250 million.

Still, Nooyi said the company is well-positioned in both product mix and geographic positioning.

WhiteWave

WhiteWave has been growing sales at a 19 percent compound annual growth rate (CAGR) since its creation in 2012. 2015 sales were just shy of $3.9 billion. Even better is operating income, growing at 29 percent CAGR in that same time, to $375 million last year.

COO Blaine McPeak said the company is well positioned for current trends: It's a leader in plant-based and organic foods, has a growing European presence and 75 percent of its portfolio is non-GMO. Last year it opened a new R&D center. 2015 acquisitions Wallaby Australian-style yogurt and Vega nutritional products also are in attractive categories.

New products coming on line include organic banana flavored milk, International Delight creamers sub-branded Simply Pure (they have only five ingredients) and Nutchello flavored nut milks in exotic flavors (coconut cashew milk, chocolate walnut milk and caramel almond milk).

Chairman and CEO Gregg Engles alluded to some delays in getting a China joint venture, including a factory, off the ground, but said products should launch in that market by mid-2016.

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