PepsiCo North America Zips Its Soda Acquisition Purse

17 December 2008

NEW YORK: Addressing a conference hosted by soft drinks industry bible Beverage Digest, PepsiCo chairman/ceo Indra Nooyi (pictured) raised eyebrows with the revelation that the company has zipped its acquisition purse.

Said Nooyi: "In North America I'd like us to make no more beverage acquisitions. It doesn't make sense [and] there are very few big acquisitions that really pay off in a significant way."

Instead the soda colossus is investing more heavily in R&D for new products. "Our research and development pipeline is well primed. But we have more products than we launch."

To help Pepsi nurture and build tiny brands slowly, Nooyi told her audience, "our incubation model needs fixing. Big companies have to be patient with these businesses."

Nooyi believes a decline in North American soft-drink sales can be halted as and when colas with a new zero calorie natural sweetener hit the shelves.

Two such products are already in the pipeline: SoBe Lifewater and Trop50, a new juice drink with half the calories and sugar or orange juice.

But PepsiCo must first wait for the Food and Drug Administration to approve the sweetener for use in drinks and beverages.

"We'll just wait for the FDA," said a Zen-like Nooyi.

Data sourced from Wall Street Journal Online; additional content by WARC staff