INSUBCONTINENT EXCLUSIVE:
Indra Nooyi is stepping down as chief executive officer of food and beverage giant PepsiCo Inc., handing the reins to a top lieutenant in a
transition that will draw attention to the dearth of prominent female CEOs in corporate America.Nooyi, 62, will leave the role in October
and remain chairman until early 2019
Ramon Laguarta, 54, who has been a candidate to take over since a promotion last year to president, will be just the sixth CEO in the
53-year history of the company.Nooyi, who is from India, is the first foreign-born CEO of Pepsi and the first woman to lead the
chips-and-soda behemoth, whose revenue topped $63 billion last year
Her departure thins the ranks of female CEOs running SP 500 companies and comes at a time when Pepsi's North American beverage unit is
stagnating amid a general decline in soda consumption
In 24 years at Pepsi, including 12 as chief executive, she has helped the Frito-Lay unit grow in a challenging industry and added healthier
drinks and snacks to a portfolio that includes Cheetos and Mountain Dew."I've had a wonderful time being CEO, but at some point you sit back
and say, look, it's a responsible move to effect an orderly transition and to have somebody else take over the leadership of this
company," she said in an interview
"Being a CEO requires strong legs and I feel like I ran two legs of a relay race and I want somebody else with nice strong legs and sharp
eyes to come and lead this company."A 22-year Pepsi veteran, Laguarta ran the Europe Sub-Saharan Africa division before becoming president
last year, overseeing global operations, strategy, public policy and government affairs
A Barcelona native, he worked at lollipop maker Chupa Chups before joining Pepsi.Nooyi attended graduate school at Yale University and
joined Purchase, New York-based Pepsi in 1994 as head of corporate strategy, rising to the CEO job in 2006
At the time only a handful of women ran major United States companies, and there are still fewer than 30 female CEOs in the SP 500.Nooyi
faced down activist investor Nelson Peltz, repelling a bid to break up the company, and has guided Pepsi through a tricky stretch as shifts
in how United States consumers eat and shop have bedeviled the largest food and beverage companies in the world."Indra's legacy is that
she's figured out in a difficult environment that she could run a great company and drive great results and do good at the same time,
while having long-lasting impact as a leader and global icon," said Blair Effron, co-founder of Centerview Partners, an investment bank and
advisory firm that's worked with a range of consumer giants including Pepsi.As she ponders her next chapter, Nooyi said she'll possibly
take a vacation, in addition to watching the New York Yankees baseball team, and, she quipped, "listen to some music, take a walk in the
woods." She hasn't thought through potential next steps, but at a time when global progress on promoting more women to CEO positions appears
to have stalled, she plans to help develop more talent to ensure that women are represented in the top ranks of corporate America."I think
people like me, after we leave privileged CEO jobs, I don't think we can go silent," she said
"We have to keep fighting the good fight to develop women, to mentor them, to support them, so that we can get more highly qualified women
-- and there's plenty of them -- into the boardroom, into C suites and into the ultimate CEO job
My job is in fact just beginning once I leave PepsiCo because I can do things now that I was constrained to do when I was CEO of the
company."Like many CEOs in a divisive political era, Nooyi has found herself a part of political discussions
She described herself at a conference as a supporter of Hillary Clinton in the 2016 election but congratulated Donald Trump for his victory
and was part of his short-lived business advisory council.During an era when a businessman occupies the White House and corporate leaders
including Mark Cuban and Howard Schultz are mentioned as potential presidential candidates, Nooyi said she doesn't see a future for herself
in politics."I think there are business leaders who like politics and there are business leaders who'd be lousy at politics," she said
"I happen to be in the second group, and so I just want to make sure that whatever I can do behind the scenes to help any cause, I will --
But politics no, not for me."Nooyi is leaving the top job at Pepsi at a time when overall soda consumption has dropped to its lowest level
in more than 30 years as consumers try to avoid sugary drinks
That's led Pepsi and competitors to try to diversify into new products perceived as healthier, and to market zero-sugar versions of their
soft drinks and retool their diet beverages.But there have been stumbles
A high-profile bid in 2015 to reformulate Diet Pepsi led to lower sales, and the company revived its old formula a year later
Nooyi told investors last month that Diet Pepsi is performing well again, but Coca-Cola has won more attention this year for its
revitalization of Diet Coke.A ballyhooed 2012 joint venture with German dairy giant Theo Muller to sell yogurt in North America fizzled four
years later due to slow sales
Pepsi was rebuffed in 2016 in its attempt to take a major stake in Chobani, the Greek-yogurt maker.The company's Frito-Lay unit, however,
remains a snacking powerhouse with brands like Tostitos, Doritos and Lay's chips dominating grocery-store shelves
Big Food companies have lost billions in revenue in recent years as consumers gravitate to more natural products made by smaller upstarts
But Frito-Lay, while not immune to the shifts, has defended its turf, controlling about two-thirds of the United States salty-snack
market.Nooyi has also worked to appeal to modern snacks
Frito-Lay has versions of 11 core chip brands without artificial ingredients, aiming to break out of the traditional snack aisle and get
into organic grocery stores
Products such as Sabra hummus and guacamole, Naked cold-press juices and Lipton Pure Leaf tea have bolstered results.During Nooyi's time
leading the company, Pepsi shares rose about 80 percent, while rival Coca-Cola has more then doubled, as has the SP 500.Nooyi said under her
tenure Pepsi considered and passed on large transactions that could have dramatically altered the company
"Everybody says, 'Hey, do a transformative deal, it will put you in the neon lights,'" she said
"The issue is that we've got to derive value from large transformative deals
And we didn't find one that would create shareholder value."Now, Laguarta prepares to take the reins at a tricky time for the company, with
pressure ramping up to ignite growth, particularly in the North American beverage unit."Ramon is the product of a responsible development
and succession plan," Nooyi said
"He's had a birds-eye view of the whole company and what kind of disruptive moves we would have to make, disruptive productivity, to take
us to this next era of growth for this company."(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and
is published from a syndicated feed.)
