Food Business News - May 3, 2016 - (Page 18)

PepsiCo initiating transformational innovation agenda We use Class IV Caramel Colors but our customers would like us to replace them with Class I Caramel Colors. How do we make the switch? 18 FOODBUSINESS NEWS ® PURCHASE, N.Y. - New product launches have contributed "significantly" to overall organic revenue growth at PepsiCo, Inc., said Indra Nooyi, chief executive officer of the Purchase-based company. For the first quarter ended March 19, net income attributable to PepsiCo was $931 million, equal to 64c per share on the common stock, down 24% from $1,221 million, or 81c, for the prior-year period. Net revenue for the quarter fell 3% to $11,862 million from $12,217 million. On a constant currency basis, core earnings per share grew 11% and organic revenue grew 3.5%. "In terms of new products ... typically what we look for is 9% of our revenue growth to come from new products and innovation," Ms. Nooyi said during an April 18 earnings call with financial analysts. "That's really what we targeted for ourselves this year, and we're running close to that number again.... And last year we came very close to that 9% number, and typically what we look for within that is sort of 75% line extensions, what we call 'refresh innovation.'" The other 25%, she said, is what the company calls "breakthrough innovation," which may be a new product platform or "substantial new packaging that can take the business to a whole new level." She cited the Mtn Dew Kickstart energy beverage as an example. "...Kickstart was a new platform, but after a couple of years it becomes part of the base of the company, and then we have to rely on flavor extensions to continue to drive it," Ms. Nooyi said. "So really how we count innovation is really stuff that's been launched and is in the market for at least two years. And we look at the performance of that business on a rolling basis." Ms. Nooyi said PepsiCo is reshaping its product portfolio to capitalize on consumers' increasing interest in health and wellness. "Just to give you an idea, we track two sets of numbers," she said. "First, what PepsiCo's distribution of net sales worldwide in 2015 Asia, Middle East and North Africa 10% Latin America 13% Europe, Sub-Saharan Africa 17% Quaker Foods North America 4% North America Beverages 33% Frito-Lay North America 23% Source: PepsiCo, Inc. we view as everyday nutrition, which includes products that provide positive nutrients like grains, fruit and vegetables and protein, plus those products that are naturally nutritious like water and unsweetened tea. These products account for almost 25% of our portfolio by revenue. "Second, what we view as guilt-free products. These include the everyday nutrition products plus diet beverages and other beverages that are below 70 calories per 12 oz and snacks with low levels May 3, 2016

Table of Contents for the Digital Edition of Food Business News - May 3, 2016

Food Business News - May 3, 2016
Dr Pepper pivoting with the consumer
New front opens in the battle over sodium
Beverage Business News - Beverage makers capitalizing on dairy
Table of Contents
Web Contents
Editorial - Vermont’s immediate impact is becoming clearer
Three meals a day still the American way
Mondelez battling weakness in biscuit market
Pinnacle picks Mondelez exec as new c.e.o.
Chipotle Mexican Grill in the midst of a slow recovery
Hormel sells Diamond Crystal Brands
Starbucks sets forth single-serve strategy
PepsiCo initiating transformational innovation agenda
McCormick acquires Australian herbs company
Costco eyes Nebraska for new poultry plant
Hershey still seeking answers to slow growth
Nestle, R&R to create world’s third largest ice cream company
Saputo details succession plan for presidency
Papa John’s removes HFCS from menu
Danone building strength in yogurt
Dannon to go non-G.M.O.
Taco Bell to limit antibiotics in chicken
Dr. Praeger’s focused on keeping brand fresh
PepsiCo appoints new global food service leader
NatureBox moves from snail mail to retail
Market Insight - The good and bad of El Nino, La Nina
Ingredient Trends - Clean label gains momentum
Food packaging and clean label
Ingredient Innovations - Red means go in color innovation
Specialty dairy ingredients used in beverages
New Food Products
Ingredient Market Trends - I.G.C. forecasts world wheat stocks at new record in 2016-17
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - May 3, 2016