PepsiCo Inc.: Watching Its Calories

June 14, 2006
Maker of popular soft drinks offers a variety of new products, including some that won't leave consumers with a sugar high.

PepsiCo Inc. is in the midst of an image makeover. The Purchase, N.Y.-based parent company of popular brands such as Pepsi-Cola, Frito-Lay and Tropicana, is continuing its push to offer healthier products along with its traditional high-calorie, sugary beverages and salty snack foods.

The company recently introduced Dole Sparklers, described by PepsiCo -- one of IndustryWeek's IW 50 Best Manufacturers for 2006, as "an invigorating, low-sugar sparkling juice" made with fruit, B-complex vitamins and half the sugar and calories of a typical juice drink. The product comes in pomegranate blueberry, orange tangerine, cranberry raspberry and pink grapefruit flavors and will become available in October. In November, the company will launch Sierra Mist Cranberry Splash, a lemon-lime soft drink with cranberry flavoring. This product will be available only for eight weeks with packaging that reflects the holiday season.

This summer the company will begin offering Diet Pepsi Jazz and Ben & Jerry's Milkshakes. Jazz is a zero-calorie drink that comes in black cherry-French vanilla and strawberries and crme flavors. This past April, the company introduced Starbucks Iced Coffee bottled coffee drinks made with Starbucks Italian roast coffee and "a hint of milk and sweetness."

"We're constantly examining our product pipeline to develop innovations that will satisfy the unmet needs of our consumers," said Meena Mansharamani, senior vice president of innovation and insights for Pepsi-Cola North America, in a May 18 statement.

The company's release of new waistline-friendly products is part of its ongoing health kick. In January the company introduced a new cereal made with oats and vanilla-flavored yogurt called Life Vanilla Yogurt Crunch. The company also added some healthier snack offerings last year when it purchased the Stacy Pita Chip Co. and Sarah Lee Corp.'s European nuts business.

The company also is continuing with its S.M.A.R.T. program to promote healthy lifestyles in children by helping to build playgrounds in low-income areas, encouraging proper nutrition in schools and labeling products with a Smart Spot symbol that indicates nutritional benchmarks set by the Food and Drug Administration and the National Academy of Sciences.

Apparently, PepsiCo also has been focused on environmental health. Its Frito-Lay business unit was recognized by the Environmental Protection Agency and the Department of Energy for energy conservation, said the company on June 5. The EPA and DOE named Frito-Lay Partner-of-The-Year in Energy Management for its accomplishments and leadership it the federal Energy Star program.

PepsiCo Inc.
At A Glance

PepsiCo Inc.
Purchase, N.Y.
Primary Industry: Beverages
Number of employees: 153,000
2005 In Review
Revenue: $32.6 billion
Profit Margin: 12.52%
Sales Turnover: 1.03
Inventory Turnover: 8.77
Revenue Growth: 11.28%
Return On Assets: 14.57%
Return On Equity: 30.16%

Frito-Lay has reduced overall energy consumption 21% across 34 U.S. manufacturing facilities and has saved more than $40 million in energy costs since launching its energy-management program in 1999, the company said.

The company's energy-management program includes the use of scorecards and customized action plans for each site that engage and recognize employee achievements.

"Frito-Lay's innovative programs engage our people to protect the environment by reusing, recycling or removing natural resources from our processes," said Rich Beck, senior vice president of operations for Frito-Lay North America, in a June 5 statement. "As part of the company's commitment to sustainability, we work hard to conserve water, fuels and electricity through the people, processes and technology employed throughout daily operations."

In other recent news, the company has been working with Warner Bros. Entertainment Inc. to promote the release of "Superman Returns" scheduled for June 30. Some of the promotions include a $1 million award to the winner of the Capture Lex and Win sweepstakes found on Pepsi-product packages, a Find Superman and Win promotion on select Quaker and Tropicana products and Superman Returns Mattel Toy Bucks included with Frito-Lay 24-count snack packages and Frito-Lay crackers that can be used for discounts on Mattel toys.

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About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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