PepsiCo names new CEO as Indra Nooyi steps down after 12 years

PepsiCo CEO Indra Nooyi is stepping down from the role after 12 years, effective 3 October 2018. Replacing her is Ramon Laguarta, currently president of PepsiCo, who has been with the company for 22 years. Meanwhile, the rest of the PepsiCo senior leadership will remain unchanged.

Nooyi will remain as chairman until early 2019 to ensure a smooth transition. During her time as CEO, PepsiCo delivered strong results under Nooyi’s leadership, the statement said. This includes a total shareholder return of 162% from 31 December 2006 to 31 December 2017, and a net revenue growth of US$35 billion in 2006 to US$63.5 billion in 2017, a compound annual growth rate of 5.5%.

According to presiding director Ian Cook, who speaks on behalf of PepsiCo’s board of directors, Nooyi also grew revenue more than 80%, outperforming peers and “adding a new billion-dollar brand almost every other year”. As such, US$1,000 invested in PepsiCo in 2006 is worth more than two-and-a-half times that amount today, Cook explained. Under her leadership, PepsiCo also grew its portfolio of Good for You and Better for You options from about 38% of revenue in 2006 to roughly 50% in 2017. It also almost tripled its investments in research and development to expand its more nutritious offerings while minimising its environmental impact.

“Nooyi has also, selflessly, served as a mentor for associates up and down the organization, building close relationships with leaders in every one of PepsiCo’s key markets, championing diversity and adhering to the highest standards of corporate ethics,” Cook said.

As president, a role Laguarta held since September 2017, Laguarta oversaw global operations, corporate strategy, public policy and government affairs. He also previously served as CEO, Europe Sub-Saharan Africa, one of PepsiCo’s most complex businesses, the statement said. This is with operations spanning three continents and comprised of developed, developing and emerging markets.

Prior to that, he served as president, PepsiCo Eastern Europe region and served in a variety of sales, marketing and other commercial roles across Europe. Before PepsiCo, Laguarta worked for Chupa Chups, where he held a number of international roles in Europe and the US.

“Leading PepsiCo has truly been the honour of my lifetime, and I’m incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve,” said Nooyi.

“I’m incredibly humbled and privileged to be appointed the next CEO of PepsiCo, and I want to thank the Board of Directors for the confidence they have placed in me with their decision,” Laguarta said.

“Ramon Laguarta’s unanimous appointment follows a systematic and thorough succession process by the Board of Directors. Laguarta equally represents continuity and the necessary agility for PepsiCo,” Daniel Vasella, chairman of the board’s nominating and corporate governance committee, said.

In April, Nooyi revealed that PepsiCo's share of voice had "fallen dramatically relative to [its] key competitor, which substantially stepped up [its] media spending on colas over the past two years. This saw the brand tightening and elevating brand communications by launching the Pepsi Generations campaign, which supports all brands under the Pepsi umbrella such as Diet Pepsi and Pepsi Zero Sugar. This led to the company “more effectively” leveraging media investment across its full Pepsi portfolio.

The year has also seen PepsiCo revealing that it would be increasing its advertising spend behind its “big brands”, such as Pepsi, Gatorade and DEW. This is with expectations of positive impact, said Hugh F. Johnston, vice chairman, CFO and executive VP at PepsiCo. Johnston added that the brand’s strategy in the beverage business is focused on brand building.