Pepsico: “Snackifying drinks, drinkifying beverages”

In its recent business strategies, PepsiCo has emphasised it wants to extend its “nutrition” business. The company’s recent acquistion of dairy giant Wimm-Bill-Dann in Russia has been just approved by authorities, bringing the company much closer to its goal reach sales of 30 bln dollars a year in the nutrition segment.

But in its established markets as well, PepsiCo is looking at introducing new products, for example Tropolis, an 80-calorie fruit puree, which PepsiCo’s Tropicana is rolling out in test markets in the US in 2011.

PepsiCo’s business strategy is thus clearly different from Coke. While the latter is still mostly concentrating on beverages (although adding juices and mineral water to the traditional carbonated soft drinks portfolio), PepsiCo is looking not only at snacks, but at what Chairwoman and Chief Executive Indra Nooyi calls “good-for-you” products. The nutrition group is thus charged with developing new products that would “combine” snacks and beverages – mixing dairy products with juice, grains, fruits and nuts and thus taking advantage of the different products PepsiCo has in its portfolio.

“We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience,” said  Indra Nooyi, PepsiCo Chairwoman and Chief Executive.

It remains to be seen if consumers will accept the claim that these products are “good for them”.

Unions, in any case, need to make sure they will build strong representation not only in the traditional businesses, but in the factories producing these new flagship products as well.