Food Business News - October 23, 2012 - (Page 58)

three-prong strategy of maintaining a reasonable everyday low price, effective advertising and product news. “We have plans next year for improved product news on the base Gatorade business that I think will add some growth,” he said. Beverage still tops at Pepsi…barely W hile it has not grown as quickly as its food business, the importance of beverages globally at PepsiCo remains considerable. In the company’s 2011 annual report, Indra Nooyi, chairman and chief executive officer, noted that drinks accounted for about 52% of sales in 2011 and are a “highly profitable” part of what PepsiCo, Inc. does. “Our goal is to grow our developed market beverage business while building on promising gains in emerging and developing markets,” she said. “We intend to continue to invest in and strengthen our most powerful and iconic beverage brands.” The company’s brands include Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, 7UP (outside the U.S.), Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist and Mirinda, and Pepsi Americas makes, markets, sells and distributes these brands as beverage concentrates, fountain syrups and finished goods, operating either independently or through contract manufacturers. Also independently or through contract manufacturers, Pepsi makes, markets and sells ready- to-drink tea, coffee and water products through joint ventures with Unilever (under the Lipton brand name) and Starbucks. The company licenses the Aquafina water brand to its independent bottlers. Finally, the company manufactures and distributes certain brands licensed from Dr Pepper Snapple Group, Inc., including Dr Pepper and Crush. The company operates its own bottling plants and distribution facilities. In February 2010, the company acquired its anchor bottlers, The Pepsi Bottling Group, Inc. and PepsiAmericas, Inc. Even as the division has struggled, Pepsi Americas Beverages is the largest segment at the company, accounting for 34% of revenues in 2011 (Frito-Lay North America and Europe rank second, accounting for 20% of revenues each), 30% of operating profit (Frito-Lay is more profitable, 33%), 43% of assets (Europe is second, 25%) and 30% of capital spending (Asia, Middle East & Africa is second, at 21%). BBN Ms. Nooyi also was optimistic about Gatorade, suggesting a significant part of the weakness was “an inventory problem at a certain customer.” She remained steadfast in her commitment to the company’s strategy for building the brand. “As we go into Q4, we are already into positive territory and again what we want to make sure in Gatorade is that we don’t make the mistakes that we made in the 2004, 2005, 2006 time frame where we grew it as a general hydration product as opposed to a sports nutrition product,” she said. “Because if we go back to that strategy of just selling it as an everyman’s hydration, and just another beverage, we are again renting volume. We’ve been there, done that. So we want to make sure we’re going after the active, going after the athlete, sustaining our pricing and flanking our core Gatorade product with innovation.” BBN — L. Joshua Sosland 58 FOODBUSINESS NEWS ® October 23, 2012

Table of Contents for the Digital Edition of Food Business News - October 23, 2012

Food Business News - October 23, 2012
Private label penetration forecast to grow in U.S.
Softer demand slows rate of Nestle sales growth
Drought’s impact becomes clearer
Table of Contents
Web Contents
Editorial - Food issues dampened before election
Culver acquisition boosts B&G third-quarter income
Foreign exchange rate cuts into McDonald’s earnings
Structural changes cut into PepsiCo sales in third quarter
Legislation proposed to track antibiotic use on farms
Dean Foods posts preliminary WhiteWave-Alpro results
California poultry processor files for Chapter 11 protection
Peapod testing virtual grocery stores in the Northeast
Shell egg prices push Cal-Maine income up sharply
ConAgra to close pork processing plant
Cereal Partners Worldwide to reduce sugar, sodium
Frozen food sales projected to remain sluggish
New food safety effort targets consumers
ConAgra Foods looks to heighten focus on nutrition addition
Cholesterol profile of U.S. adults improving
Food and beverage C.P.I. increases in September
Strong China results boost Yum! earnings
Global Greek yogurt introductions accelerate
Sunland recall reverberates throughout the industry
JBS USA has option to acquire XL Foods
Washington - F.D.A. issues guidance for food facility registration
Sports Nutrition - Broadening the appeal for sports nutrition products
Ingredient Innovations - Ushering in the next generation
Convenience Store Trends - On-the-go gourmet
Beverage Business News - Looking for a Pepsi rebound
Old Orchard debuts frozen sweet tea line
Red Bull to add fruit-flavored energy drinks
Lawsuit takes aim at New York’s 16-oz beverage rule
Coca-Cola profit climbs on volume growth
Beverage industry embraces calorie counts on vending machines
Journal report links sugary beverages to obesity
Tingyi partnership poised for flight
Beverage still tops at Pepsi...barely
Beverage Trends - An (energy) shot in the arm
New Food Products
Ingredient Market Trends - CME Group to acquire the K.C.B.T
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - October 23, 2012