2014 Brandcameo Product Placement Awards

sip on this

Pepsi Challenge: Keeping Investors and Consumers Happy, and the Wolves from the Door

Posted by Dale Buss on November 17, 2011 03:53 PM

Remember when PepsiCo only sold beverages and snacks? Nowadays, the company keeps moving further afield with social-media efforts such as its Pepsi Refresh pro-social community grants and year-old startup partnership project.

But there continues to be murmurs from investors who are eager to see PepsiCo get back to what they feel should be "its knitting" — the core business of selling those beverages and snacks, and developing new variations to keep consumers coming back for more.

Take its year-old PepsiCo10 startup booster. Shiv Singh, PepsiCo's global head of digital marketing, told an Ad Age conference this week that the strategy is to get in on the ground floor with startups that could become the next Foursquare, Twitter or, indeed, Facebook or Google, and have them partner with PepsiCo brands to inject more innovation into their marketing and product development channels.

On social, PepsiCo — the subject of a recent hour-long special on CNBC called Pepsi's Challenge — has been a leader in testing new digital waters to engage consumers, teaming up with Foursquare, for instance, when it had just 400,000 users.

Today it has more than 10 million FourSquare followers worldwide, the magazine said. PepsiCo now pours about 10 percent of its digital spend into startups as part of a worldwide move by PepsiCo (via its year-old tech incubator program, PepsiCo10, which partnered Zazu's mobile app whizzes with Quaker among others) to own and build its own platforms and experiences.

But not everyone is convinced this is the way for PepsiCo to go. It's one thing to venture, along with rivals in the food and beverage category, into the better-for-you arena, this thinking goes — but pursuing entirely new business models such as greatly expanded digital-venture funding may be distracting from the company's main mission: generating returns for shareholders.

JustDrinks.com reports that some PepsiCo board members, investors and analysts are concerned that CEO Indra Nooyi's plunge into more healthful fare comes at the expense of fixing the company's stagnant stock price.

Looking ahead, another challenge facing Nooyi and her leadership team is the increased pressure for PepsiCo to split in two as fellow CPG giant Kraft's board recently decided to do, which makes activist investor Nelson Peltz ponying up for a $150-million stake in the company all the more interesting. It's relatively tiny compared with PepsiCo's capitalization, but it could mean that if wolves aren't at the door, they're at least picking up a scent.

One bright spot that's boosting its stock price (to $71) — the company's investments (representing billions of dollars) being poured into China and India.

Comments

John Bowman United States says:

Cool story, bro

November 24, 2011 07:02 PM #

Comments are closed

elsewhere on brandchannel

1 2 3 4 5 6 7 8 9
brandcameo2014 Product Placement Awards
Apple loses its crown to a new #1
Coca-ColaIt's the Journey That Matters:
Coca-Cola Opens Up With Story-Based Web Refresh
debateJoin the Debate
Is product placement a waste of money?
BPBP
Branding Comeback Challenges
Arthur Chinski and Joshua Mizrahi
Model Behavior? Brands Beware
U.S. Legal Changes Impact Use of Brand Ambassadors
Digital Watch: WahlAT&T
Rethinking Possible With Transmedia Storytelling
paperGlobal Competitive [Ad]vantage
The latest from GeoEdge
Sheryl Connelly
Sheryl Connelly

Meet Ford's Resident Futurist
MetaluxuryMeta-Luxury
Brands and the pursuit of excellence

Advertisements