Food and Drinks

PepsiCo CEO Indra Nooyi, rare female leader of a multinational corporation, is stepping down

Of the companies in the S&P 500, only 25 – or 5 per cent – are led by women, including Nooyi.

PUBLISHED : Tuesday, 07 August, 2018, 3:23am
UPDATED : Tuesday, 07 August, 2018, 3:23am

Indra Nooyi, one of the most prominent female CEOs in the world, announced Monday that she would step down as head of PepsiCo after 12 years of navigating the soft drink and snacks company through a tricky climate of shifting consumer taste amid rising health concerns.

Nooyi, 62, who was born in India, will be replaced as chief executive by President Ramon Laguarta on October 3, but will remain as chairwoman of the board until early 2019 to oversee the transition.

“Today is a day of mixed emotions for me,” Nooyi said on Twitter. PepsiCo “has been my life for 24 years & part of my heart will always remain here.”

Of the companies in the S&P 500, only 25 – or 5 per cent – are led by women, including Nooyi.

The group includes Lockheed Martin’s Marilyn Hewson, IBM’s Ginni Rometty and General Motors’ Mary Barra, who in June appointed Dhivya Suryadevara as the company’s first female chief financial officer.

Nooyi told Bloomberg News on Monday that she planned to advocate for more women to serve at the highest levels of corporations, saying, “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.”

Her tenure included sparring with activist investor Nelson Peltz and fighting against a spate of municipal soda taxes.

In October 2016, PepsiCo unveiled 2025 sustainability targets that included vows to reduce waste and to ensure that at least two-thirds of its global beverage portfolio contains less than 100 calories per serving.

Even as Nooyi has stressed these long-term targets, she has been unapologetic in promoting the company’s products, which include snacks under the Frito-Lay banner such as Doritos tortilla chips, in addition to sugary carbonated drinks such as Pepsi and Mountain Dew.

Analyst Neil Saunders praised Nooyi for leading during an “extremely challenging” period in consumer products, praising in particular the decision to stick with snacks.

“With demand for soda under pressure, PepsiCo can now take comfort in the fact that it has a balanced portfolio of products – including in emerging areas like plant-based snacks from its recent acquisition of Bare Foods,” said Saunders, managing director of GlobalData Retail.

PepsiCo presiding director Ian Cook hailed Nooyi as a “pioneer” among major chief executives in introducing sustainability targets into business performance and for bolstering its portfolio of healthier foods.

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“She has delivered strong and consistent financial performance, managing with an eye toward not only the short-run, but the long-run as well,” Cook said.

Nooyi came to the United States in 1978 to attend the Yale School of Management on a scholarship and worked at PepsiCo for 12 years prior to being tapped to lead the company.

Under her leadership, PepsiCo net revenues rose from $35 billion in 2006 to $63.5 billion in 2017, with much of the growth coming from international markets.

PepsiCo’s moves included buying a 50 per cent stake in US hummus maker Sabra in 2008 and acquisition of Brazilian snack company Mabel in 2011, a year that also saw the company unveil an alliance with Tingyi Holding in China.

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Nooyi came under pressure from Peltz, who called for the company to be broken up in 2014. But Nooyi successfully beat back the challenge with a series of cost-cutting measures. Peltz exited the stake in 2016.

She dismissed soda taxes as panacea and said the surge in obesity needed to be countered in a “holistic” way to address huge portion sizes and other factors.

Days after the 2016 presidential election, Nooyi expressed concern that Donald Trump’s actions on trade could harm US multinationals in foreign markets and decried his rhetoric against immigrants and women.

“Our employees, especially our employees who are non-white or who are LGBT, are asking, ‘Are we safe?’” said Nooyi, who had supported Hillary Clinton in the race.

“The first thing we have to do is assure everyone in the US that everyone is safe.”