Pepsi drinkers were once encouraged to embrace the “choice of a new generation”. Investors now seem ready to do exactly that with the appointment of Indra Nooyi as PepsiCo’s new chief executive. In her 12 years with the company, Ms Nooyi has been instrumental in redirecting Pepsi’s resources towards high-growth areas, such as sports drinks and low-fat snacks. This helped contain investor disappointment about the slightly premature departure of Steve Reinemund after just five very successful years in the top job.
Much of this is down to teamwork. Shares in Pepsi, the traditional underdog when it comes to carbonated soft-drinks, have consistently beaten those of arch-rival Coca-Cola for almost a decade. Although the snacks and drinks maker occasionally raised eyebrows by paying full prices for acquisitions, its move towards healthier products has paid off handsomely.
Pepsi also spotted the potential for hiring people from more diverse backgrounds earlier than most companies. Recent executive departures highlight that it has done well in fostering internal talent, people who are highly employable elsewhere. Having grown up in India, Ms Nooyi epitomises that early emphasis on trying to be truly global. This may prove helpful, for example, in India given recent populist concerns.
With Pepsi’s strength now well understood, Coke stepping up the pressure and Pepsi’s shares trading at 21 times prospective earnings, Ms Nooyi may struggle to provide much of a fizz for its stock soon. As one of the world’s highest-profile women chief executives, she is also likely to attract a great deal of attention in the event of any mis-steps. Given the rise of women within many companies over the past decade, however, others are bound to follow swiftly.