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brand strategy

PepsiCo Nixes Idea of Splitting Company As Frito-Lay Powers Sales Gains

Posted by Dale Buss on February 13, 2014 06:04 PM

Whatever Pepsi Beverages and Frito-Lay accomplish from here on out, they'll do it together. That was the unequivocal message of PepsiCo CEO Indra Nooyi in the company's fourth-quarter earnings report.

She acknowledged pressure from activist investor Nelson Peltz for the company to spin off the dwindling soft-drink business from the robust snack business; Peltz also has said he'd like to see Frito-Lay combine with Mondelez but recently dropped that idea after getting a seat on Mondelez's board.

Nooyi said that she even had external consultants and bankers look at the possibility of dividing beverages from snacks. But she said that the company would remain integrated after all in part as a matter of scale. "Decoupling our beverage and snaCk businesses in North America would significantly reduce our relevance to our customers," Nooyi said, according to Reuters.Continue reading...

brand roadmaps

Soda Decline Whacks PepsiCo, but Frito-Lay's Global Growth Provides Offset

Posted by Dale Buss on October 16, 2013 05:39 PM

The size and speed of the decline in consumption of Pepsi and even Diet Pepsi in the US market has taken PepsiCo by surprise. Good thing the diversified global snack giant has been able to rely on sales of carbonated soft drinks and other beverages abroad and on improving performance by its Frito-Lay snack business.

Those were among the main takeaways from PepsiCo's earnings report and executive conference call with securities analysts on Wednesday, as CEO Indra Nooyi provided some color behind a mostly positive showing of a 2 percent rise in overall second-quarter revenue, a 35 percent gain in net income including some special factors, and $900 million in productivity gains.

PepsiCo posted strong growth in Asia, the Middle East and Africa across the board and in its Americas-wide snack business. "We have performed well because our portfolio of brands are extensive and strong, our products are on trend and relatedly diverse," Nooyi said on the call. "And we have a broad geographic footprint."Continue reading...

brand strategy

PepsiCo Snacks Win, Beverages Lose in US as Peltz's Merger Proposal Looms

Posted by Dale Buss on July 25, 2013 01:39 PM

PepsiCo is riding high on snacks and trying not to be brought low by its soft-drink business. But that doesn't mean the company is accepting the logic behind activist investor Nelson Peltz's attempts to get PepsiCo to spin off beverages and buy snack-happy Mondelez International.

Second-quarter food revenue in the Americas grew by 5 percent for PepsiCo while beverage revenues slumped by another 2 percent. Brands including Doritos and Tostitos, by Frito-Lay, drove PepsiCo's overall domestic growth, while its European business only chugged along and revenues in Asia, Africa and the Middle East combined, both beverages and food, grew by 6 percent.

Also, more evidence surfaced this week to bolster concerns recently expressed by PepsiCo CEO Indra Nooyi about the future of artificial sweeteners in beverages. Larry Young, CEO of Dr Pepper Snapple, agreed in a conference call that consumers "have concerns about artificial sweeteners." His company has lowered its sales outlook for the year.Continue reading...

chew on this

Could a Mondelez Merger Be in PepsiCo's Future? Nelson Peltz Hopes So

Posted by Dale Buss on July 22, 2013 12:49 PM

Oreos, Fritos, Doritos, Cadbury, Trident and Sunchips all on the same truck as they head to the supermarket? That's a vision of a highly symbiotic, cost-efficient brand and product portfolio and distribution scheme, if you ask Nelson Peltz. He'll be happy to see some other distributor getting the Pepsi into the beverage aisle and the Naked Juice into the refrigerators in the produce department.

That's part of the scenario being sketched by activist investor Nelson Peltz as he presses PepsiCo to spin off its uneven drinks business, then purchase Mondelez International so the two snack giants can combine their stables of diverse and powerful brands both in the US and international arenas. Such a global snack giant would have $70 billion in combined revenue and 17 snack brands that each has more than $1 billion in retail sales.

Peltz said at a recent conference that PepsiCo is at "a crossroads" with a beverage business that was losing market share in soft drinks to CocaCola and to which PepsiCo CEO Indra Nooyi has only recently—and seemingly grudgingly—given more marketing support.Continue reading...

brand strategy

Mondelez Sees Huge Growth Potential in Snack-Happy Emerging Markets

Posted by Dale Buss on May 7, 2013 12:38 PM

If love is the universal language, snacks may be the universal food. And that's one reason the spinoff of Mondelez International from Kraft Foods last year looks more and more like a good move, at least for Mondelez and its shareholders.

Mondelez's portfolio of global snack brands—ranging from Oreo to Cadbury to Trident—relies on emerging markets for about 40 percent of its revenue right now, and by 2020 the company projects that 110 million households in India, Russia and Brazil will move into the middle class, the socioeconomic stratum where serious snacking begins in most markets because consumers have achieved the economic wherewithal for recreational eating.

"As they do, we believe they'll step up their chocolate consumption by about three times," Bharat Puri, Mondelez's senior vice president of global chocolate, told analysts recently, according to Advertising Age.Continue reading...

trademark wars

Frito-Lay Loses Trademark Battle Over Popular Corn Chip

Posted by Mark J. Miller on April 15, 2013 11:50 AM

PepsiCo’s Frito-Lay Scoops Corn Chips may identify itself as “a unique combination of great taste and good fun rolled into one great snack,” but a jury in Texas has a few quibbles with just how unique its name is.

Frito-Lay North America came after Medallion Foods and Ralcorp Holdings for their Bowlz and Cupz chips that appeared in Walmarts and Krogers, respectively, around the time of this year’s Super Bowl, FoodProductDesign.com reports. Frito-Lay was not amused and wanted $4.5 million for their troubles as well as the disappearance of any products that come close to looking like Scoops.

After just five and a half hours, the 10-person jury ruled against Frito-Lay. “This was a very complicated trial, and we were fortunate to have an extremely smart jury that understood the issues and delivered a just verdict,” said John Ward, whose firm Ward & Smith helped represent Medallion, according to IPWatchdog.com. “This jury digested almost 40 pages of complex instructions and returned a verdict in our clients’ favor on all issues submitted.”Continue reading...

cause celeb

Tostitos Rallies Football Fans, Celebs to Welcome Home US Troops

Posted by Dale Buss on December 14, 2012 05:01 PM

If ever a non-alcohol brand has been associated with partying, it's Tostitos. The brand always promotes itself heavily for Super Bowl consumption and sponsors its own college-football bowl game, the Tostitos Fiesta Bowl, every year, including a campaign last year.

The Frito-Lay-owned sibling brand of Doritos also has associated itself with "homecomings" for U.S. military members over the last few years.

So now Tostitos, as you can follow along on its Facebook page, has joined those interests into a huge new promotion that combined partying and homecoming. It sponsored a football-field "surprise party" for selectd U.S. military veterans who only thought they had shown up to play a flag-football game for charity.

Instead, the 28 unsuspecting service men and women were greeted at the Cerritos College stadium near Los Angeles by more than 12,000 "fans", legendary college coaches Urban Meyer and Bobby Bowden, NFL veterans Kurt Warner and Marcus Allen, actors Owen Wilson and Eric Stonestreet, and chart-topping band Gym Class Heroes. And they all had their roles in the game.Continue reading...

chew on this

SunChips All-Natural? One Man Doesn’t Think So

Posted by Mark J. Miller on January 31, 2012 06:07 PM

If you get all puffed up with double scoops of self-righteousness whenever you put your pennies toward munchies with “all-natural ingredients,” such as Frito-Lay’s Tostitos or now-quieter SunChips, instead of the alternative, a New York man is suggesting that you might want to chill out.

New Yorker Chris Shake has filed a “proposed class-action lawsuit” that claims “snacks actually contain corn and oils made from genetically engineered plants.” Shake says in the suit that he paid an extra dime per ounce so he could have all-natural products, but then “independent testing conducted on samples of Frito-Lay products labeled ‘all natural’ uncovered the presence of ingredients — including corn and vegetable oils — made from genetically modified plants,” according to Reuters.Continue reading...

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