Announcing a management shakeup, PepsiCo said this week that it would make Indra Nooyi, 50, its new Chief Executive Officer. She said she was humbled to have been chosen.
India-born Nooyi is only the fifth CEO in the 41 year history of one of the worldâ€™s largest convenience food and beverage companies with revenue topping $32 billion.
Taking over from Steve Reinemund, Pepsiâ€™s CEO and chairman for the past five years, Nooyi faces the unenviable task of not only maintaining the strong growth momentum that her predecessor left her, but staying competitiveness against arch-rival Coca Cola.
Reinemund, who worked with the New York-based firm for 22 years, said that he had decided to resign as from both his positions, indicating he would leave the company in capable hands with Nooyi. During his time as head of the company, he implemented a wave of restructuring programs, often working together with Nooyi in major projects.
â€œHaving worked side-by-side with Indra for many years, I am convinced she is more than qualified and clearly ready for her new role leading PepsiCo.,â€ said Reinemund.
Starting in 1994, as a senior vice-president of the firm, later moving to become the Chief Financial Officer, Nooyi oversaw two significant changes within the company.
The first was the spin-off of the Pepsi Bottling Group (PBG) distribution company in 1999, where PepsiCo retained a 40 percent stake. In 2001, Nooyi proposed that PepsiCo acquire Chicago-based Quaker Oats Co. because of its popular Gatorade sport drink, which at the time had 80 percent of the sports drink market. Coca-Cola lost in its attempt to acquire the company
She was also credited for contributing to the successful purchase of juice maker Tropicana in 1998 for $3.3 billion with a U.S. market share of 32 percent and divesting off its restaurant business.
The purchases were made at a time when the carbonated beverage market was maturing, with greater growth occurring in non-carbonated drinks.
The motivation of the firm to acquire Quaker and later, juice maker Tropicana was a recognition that consumers were moving toward healthier drinks especially in the United States. Just last year, non-soda drinks grew 14 percent with total sales of $18 billion, according to Beverage Digest.
When asked five years ago about why Pepsi should acquire Quaker, Nooyi stated that the firm must be less reliant on carbonated beverages.
A more immediate threat to the company is the recent claim by officials in India that Pepsi and Coke contain pesticide levels exceeding allowed limits.
Another pressure facing Nooyi is the need to maintain the companyâ€™s â€œphenomenalâ€ results, according to J.P. Morgan analyst John Faucher, noting that sales at the firm were 2 percent higher compared to Coca-Cola.