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Issue Date: Vol. 51, No. 10, October 2011, Posted On: 9/23/2011

PepsiCo Combines Americas Drinks And Snacks Units

Emily Jed
Power of One-Americas Council, Global Snacks Group, PepsiCo, Pepsi, Pepsi-Cola, Frito-Lay, Quaker, Tropicana, John Compton, Al Carey, Tom Greco, Pedro Padierna,Olivier Weber, Marc Guay, Massimo d'Amore, Luis Montoya,Indra Nooyi, vending, vending machine

PURCHASE, NY-- PepsiCo Inc. has formed a new business unit called the Power of One-Americas Council that will market its snack and beverage businesses together in North and South America. It has also created the Global Snacks Group, which will focus on driving worldwide innovation across its portfolio of snack brands.

The maker of Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi Cola brands said both initiatives will be led by John Compton, chief executive of PepsiCo Americas Foods, who will also retain responsibility for the company's $22 billion snack and food business in the Americas.

PepsiCo's top food and beverage executives in the Americas will join Compton in the Power of One-Americas Council. The group includes Al Carey, chief executive of PepsiCo Americas Beverages; Tom Greco, president of Frito-Lay North America; Pedro Padierna, president of PepsiCo Mexico; Olivier Weber, president of PepsiCo South America Foods and Central America and Caribbean; Marc Guay, president of PepsiCo Foods Canada; Massimo d'Amore, president of PepsiCo's global beverages group; and Luis Montoya, president of Latin America beverages.

"This strategically critical initiative will leverage the capabilities of the entire enterprise," said PepsiCo chairman Indra Nooyi. "Snack and beverage occasions are typically planned together, and the products are both purchased and consumed together."

The new Power of One-Americas Council will focus on helping the company better coordinate its manufacturing, sales and distribution activities and more effectively align its promotions across its snack and drink portfolios. The result, Nooyi said, will be greater operating efficiency and speed to market.

The company said the creation of its global snacks unit advances its multiyear strategy to establish global platforms for marketing, branding and innovation. Previously, PepsiCo had announced the creation of the Global Nutrition Group and the Global Beverages Group.

Meanwhile, Wall Street has been speculating about the potential value PepsiCo could add for shareholders by splitting its beverage and snacks businesses. Food and beverage giants Kraft Foods Inc. and Sara Lee Corp. both recently announced plans to split their businesses.

But PepsiCo, which last year acquired its North American bottling operations in an effort to boost its beverage business, says it believes in the power of a combined business.

"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," Nooyi added. "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."

The news follows a senior leadership shuffle at PepsiCo announced earlier this month, including a new head for its U.S. beverages unit, in a bid to regain lost sales. | SEE STORY

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