Editor's Plate: PepsiCo A Hugely Successful Company with a Huge Heart

Dec. 14, 2015
PepsiCo is our 11th annual Processor of the Year.

Past Processors of the Year

  • 2014 WhiteWave Foods
  • 2013 ConAgra
  • 2012 Chobani Inc.
  • 2011 H.J. Heinz Co.
  • 2010 TreeHouse Foods
  • 2009 Nestle USA
  • 2008 Hormel Foods
  • 2007 Mars Snackfood
  • 2006 Kellogg Co.
  • 2005 Tyson Foods

You won't find PepsiCo on a list of the world's most powerful or valuable brands. I suspect that's all right with Chairman/CEO Indra Nooyi and all employees, as well as stockholders.

The Apple brand has got to represent about 90 percent of Apple Inc. Microsoft is all computers and software. Google is overwhelmingly about its search engine. And Coca-Cola may be the company name, but that brand belongs to its namesake cola. (Those are the top four brands on Forbes' annual list.)

PepsiCo isn't even a brand, but it is the home of a hundred or so brands, 22 of which have sales of more than $1 billion each. (Coca-Cola is close, with 20 billion-dollar brands.) Many names you'll recognize, but many more you won't – that's because PepsiCo allows foreign local brands to exist, even flourish, nurtured by the wherewithal of a $67 billion global corporation, not stifled by it.

That says a lot about the strategy of this company, which has grown in its scant 50-year history from a U.S. soda and chips company to a global powerhouse of all kinds of beverages and all kinds of snacks, as well as oatmeal, cold breakfast cereals, pancake mixes (Aunt Jemima), hummus, even Rice-A-Roni.

Numbers are one of the key factors we look at in naming a Processor of the Year, and PepsiCo's numbers are stellar. But we do look for more. The official criteria are:

  • Sound financial performance (including expanding sales and profitability)
  • Innovative product development
  • Leading manufacturing technology
  • Managerial excellence
  • General industry leadership and service

…And PepsiCo excels in all of them

About that last one: "Service" is kind of vague. We fold into that considerations for community service and charitable work, as well as global citizenship; and some points for environmental consciousness, too. Perhaps no other major company scores as high on all those counts as PepsiCo.

You've probably heard of its "Performance with purpose" vision: "delivering top-tier results in a way that sustains and respects business, society and the planet." It's more than PR. There's plenty of evidence PepsiCo is living that philosophical statement, which dates back to 2007 and has been reworked a few times since.

Maybe we should add one more qualification to that list of Processor of the Year criteria: managerial courage. Investor Nelson Peltz mounted a widely publicized campaign in 2013 to break the company into two, one business focusing on what he called slow-growing soft drinks and the other on higher-growth snacks. Peltz even published a whitepaper about how to maximize shareholder value (mostly his own).

While his efforts continued for about a year, PepsiCo managers stood their ground and mounted their own "better together" campaign. Peltz's quest seems to have died a quiet death, at least in the public domain. PepsiCo management – which declined to talk about the situation – and the investor seem to have reached some kind of accommodation, with a Peltz nominee added to the PepsiCo board – none other than William Johnson, the former chairman/CEO of H.J. Heinz Co., at least up until its 2013 acquisition by 3G Capital and Berkshire Hathaway.

Worth noting, but not a reason for PepsiCo's selection, is the company celebrated its 50th anniversary this past summer. Pepsi-Cola Co. and Frito-Lay merged in 1965. So happy birthday, PepsiCo.

Read the full story about PepsiCo as 2015 Processor of the Year

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