PepsiCo Says Consumers Are Keeping Them From Offering More Healthy Products

8 months ago
75 in food

PepsiCo Chief executive, Indra Nooyi, says that the corporate giant would like to take a healthier direction in the market with its products, but the bulk of its sales still come from the unhealthy variety of chips that they provide. Consumers overwhelmingly are displaying more concern today in the market for their food and health choices, we can see this with trends like organic, non-gmo, gluten-free, and so on, but overall the people are still saying with their dollars that they want the chips.

PepsiCo brings in billions of dollars every year in sales, and they are responsible for bringing us snack items like Lay's potato chips, Cheetos, Ruffles chips, Doritos chips, Fritos corn chips, and more.

PepsiCo didn't make its sales goal for 2010 and they just recently announced their new goal this October that they hope to reach by 2025. Their main objective is to have their healthier alternative snacks that they offer, like Quaker oatmeal or the Naked juice smoothies, outpace the rest of the items in their snack portfolio. Despite their ongoing struggle to turn the corner to more healthy options, they've continued to do well and just this summer their stock set a record high. The consumers vote with their dollars and they continue to vote, by the billions, for the salty, high-carb, high-sugar, snack variety that PepsiCo offers.

PepsiCo sells their products around the world and they have six global divisions. Although consumers still continue to be driven toward the chips, we can see that competition is growing fast in the market in the way of healthier choices. It will be interesting to see, if the health trend continues, how they adapt in the future and how they adjust to trying to make their items healthier for consumers; if that is what the consumers want. And if that is the direction that consumers push the corporations to go in, by voting with their dollars, then we will see other businesses in the market follow in this direction as well.

This year, PepsiCo also paid roughly $200 million in order to acquire KeVita Inc, which is a company that makes fermented, organic-certified probiotic drinks. And they also already provide a number of gluten-free options in their snack portfolio, as far as their most-popular brands of chips go.

Pics:
portugalmundial
FactSet, PepsiCo 10-K reports
WSJ
ABC
Sources:
http://www.wsj.com/articles/pepsico-wants-to-sell-healthy-food-consumers-want-chips-1481481896
https://en.wikipedia.org/wiki/PepsiCo
http://www.wsj.com/articles/pepsico-boosts-earnings-forecast-as-results-top-views-1475147351

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Sort Order:  trending
69
  ·  8 months ago

What a legitimately great article. Re-Steemed. I hope this goes to the top of the trending page.

It's an interesting phenomena in general that the consumers have a lot of power to change a lot of the things they complain about, but when push comes to shove, they refuse to.

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75
  ·  8 months ago

thx for the kind words/support man

72
  ·  8 months ago

The challenge with offering more health products is many health-conscious people just make their own food directly and don't buy things that are bottled or processed. But either way, glad to know they are working to make improvements.

68
  ·  8 months ago

I blame Trump! Personally I don't use any of their products, mainly because I'm diabetic. For snacks I make my own or opt for yogurt. The problem with homemade healthy snacks is that giants like Monsanto are trying to limit our choices there as well. Even the "healthy" snacks marketed by mega-businesses like Pepsi come from foods containing GMO's. Good article...upvoted!

59
  ·  8 months ago

I would like to believe Indra Nooyi, but I tend to watch what a company does, and not so much what the pres says. Pepsi has had several chances to break into the better for you market, and all I have seen are "set up to fail" jobs.

Also, people who have gone to a healthier bent are the ones who have labelled coke/pepsi/HFC/Monsanto as evil and to be avoided at all cost. So, Pepsi would have to break across this gulf, even if they produced a wonderful healthy product.

And furthermore, Obama hates me. And Pepsi obeyed, and now I cannot even eat anything made by Pepsi. (food allergies)

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75
  ·  8 months ago

that is why i mentioned their hundreds of millions of dollars in investments toward healthier companies/products, which is pretty evident that they are trying to branch into that market. They have a very wide portfolio!

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59
  ·  8 months ago

I guess Snapple is the best example. They were a great company with a very nice line of products, got bought out by the big boys, and then the "Snapple" line went to shit. They made it worse, and worse for you. They probably thought that a slow decline in quality wouldn't be noticed, but it was, and sales plummeted. Then the Snapple people bought it back... but its still not what it was.

66
  ·  8 months ago

I wonder if Big Tobacco cold use this argument?
We want to make a better product, but everyone wants the one that kills them.
And we have to do what the consumer wants.

I get the feeling that Pepsi are dipping their toes into the market to see what sort of share they can get while it is still young and evolving.

They can trumpet their willingness to get into being healthy and then cross sell that to keep shifting the other goods.

e.g. From Pepsi, the company that brings you Super Healthy Drinks, the new Diet Drink filled with addictive addetives.

People will associate the new Diet Drink with the proven Super Healthy drink, and buy lots of the Diet Drink that is cheaper to make and is way more addictive.

I see this as forward thinking and smart marketing.

63
  ·  8 months ago

For those interested in going a bit deeper on this, these are some insightful interviews in the past several months with Indra Nooyi (not withstanding my disappointment for her rather intense support for Hillary Clinton), including her thought process for new products among many other things, as well as how she considers investments for the long term:

DealBook 2016: A Conversation with Indra Nooyi:

Indra Nooyi, PepsiCo Chairman and CEO & Doug McMillon, Walmart President and CEO: