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"Drinkify" This: PepsiCo's Food-Beverage Hybrid Vision Includes Drinkable Oatmeal

Posted by Dale Buss on December 13, 2012 03:18 PM

For PepsiCo CEO Indra Nooyi, the driving force of her reign has been a desire to transform the company into a purveyor of better-for-you foods and beverages for the masses as well as the classic "junk" food brands such as Pepsi soft drinks and Frito-Lay corn chips.

In this quest, Nooyi already has wheeled PepsiCo into fruit-based snack chips, all sorts of healthier beverages and, most recently, a new yogurt brand. But there's another big initiative up her sleeve that Nooyi believes will advance the company still further down her chosen, more nutritious track: "drinkifying."

That's PepsiCo-speak for the R&D push to "drinkify" snacks and "snackify" beverages — creating liquid snacks out of food and vice versa. Nooyi cited a drinkable oatmeal, Leche con Avena, produced by its Quaker brand in Latin America. And Naked smoothies have plenty of food content.

"A way to grow the beverage business is to take foods and drinkify them," Nooyi said at an industry conference sponsored by Beverage Digest this week, according to the Financial Times. "There's a whole range of products we have in the pipeline that are value-added products that can be snacks made into beverages."

The CEO has been talking about "drinkifying" more of PepsiCo's portfolio for a while, as the Wall Street Journal has been following. It's one more way in which she hopes to demonstrate the benefits of keeping PepsiCo whole as it's now constituted rather than dividing it up into slow- and fast-growing properties, as Kraft did its company, or rending PepsiCo along some other lines.

"The fact that PepsiCo is a food and beverage company gives us a more holistic view of the consumer, what foods they eat, what do they like to drink, what parts of what they eat are they willing to drinkify," she said.

It's also a way to get more from its brands, and test product innovations that could end up in other markets and appeal to new segments — so Leche con Avena could end up in the US, say, to appeal to Hispanic consumers.

Others already have begun drinkifying beverages for American palates, including Mamma Chia, whose juice-based drinks are chock full of tiny chia seeds (just don't cal them drinkable Chia Pets) and Sneaky Pete's, which sells an oat-based beverage in the U.S.

But in many ways, in the beverage business as in others, the game doesn't really start until the major teams take the field. PepsiCo US has test-marketed Tropolis, a squeezable fruit 'drink' / snackified beverage for kids by Tropicana, which may have raised a few eyebrows but "fruit squeezers" are now a big business. Now, bring on the drinkable oatmeal!

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