18 Jan 17 PepsiCo CEO Nooyi aims to “innovate the hell out of the company”
PepsiCo recently revealed a new global corporate agenda that emphasises health and social accountability. PepsiCo CEO Indra Nooyi and chief scientist Mehmood Khan (above) are committed to working toward progress in health and sustainability.
That might seem like a stretch for a company best known for hawking junk food, but chairman and CEO Indra Nooyi and chief scientist Mehmood Khan say they’re committed to making their products healthier, empowering their employees, and encouraging environmental responsibility.
At the Fast Company Innovation Festival last November, Fast Company’s Robert Safian talked to them about their ambitious plans.
Innovation is a word that is thrown around a lot. From your perspective, what is its definition?
Indra Nooyi: Anything that drives the top line of the company. Around the world, our categories are growing somewhere between 3% and 4%, which means that every year, if we want to maintain or gain [share] in the world, we have to grow our revenues somewhere between $2.5 billion and $3 billion—just to stay flat. And then our base erodes every year because [some of our] products die.
So our gross growth has to be about $5 billion a year. That is a big challenge. So I have to innovate the hell out of the company. The magnitude of addition that we have to do to the top line just to hold share or gain a little globally is huge.
Um, do you sleep much at night?
IN: I don’t. And I’m emailing Mehmood about how to get me things faster.
Mehmood, Indra says you’re the star of innovation. When it comes to this $5 billion number, is that on you?
Mehmood Khan: [When we] think of technology and R&D, what we are really talking about is invention, not innovation.
Innovation is when you take inventions and actually solve for a consumer need. There’s the consumer-facing innovation that we see on the shelf in the supermarket. There is another on the back end: what products we make, where we get the ingredients, how we grow the agricultural components, how we distribute, how we manufacture.
A key part of my role is how to put the jigsaw puzzle together. And the consumer is changing fast and increasingly telling us what they want, but not often in very clear terms.
You just announced a new sustainable-growth agenda for PepsiCo: goals for 2025 based on three pillars. The first is “helping to improve health and well-being” through your products. PepsiCo’s business has historically been built on sugary drinks and salty snacks. Doritos are delicious, but we don’t think of them as being healthy. Is there anything inauthentic about your trying to improve health and well-being?
IN: PepsiCo’s business is three pieces. It has fun-for-you beverages and snacks: Pepsi, Mountain Dew, Lay’s, Doritos, Fritos, Cheetos . . . I could go on. All the ’tos. [Laughs]
The second is what I would call better-for-you: Diet Pepsi, Baked Lay’s, Baked Doritos. And then there’s the good-for-you piece: Quaker Oats, Tropicana, Naked Juice.
We are trying to take the fun-for-you portfolio and reduce the salt, sugar, and fat. I didn’t create Pepsi Cola. I didn’t create Doritos or Fritos or Cheetos. I’m trying to take the products and make them healthier. And guess what they tell me? “Don’t be Mother Teresa. Your job is to sell soda and chips.”
So this is not being disingenuous. We are trying to take a historical eating and drinking habit that has been exported to the rest of the world and make [it] more permissible.
To what extent is your job to teach consumers that we shouldn’t eat foods that aren’t as healthy, versus giving us products that we like?
MK: I might be a health care professional [Khan is an endocrinologist], but that is not my job now. My job is to take the best advice that exists and figure out how we can deliver products to consumers so they can make the right choices. We are doing our part. Everybody else has to do their part.
IN: We have to make sure that the healthier products, [like] Quaker and Tropicana, taste good and are reasonably priced—because you shouldn’t have to pay more for healthy products—and are ubiquitously available. Then we have to display them so that we nudge you to the healthier choices.
Look, there is a time and place for the fun-for-you products. We are not nannies, and I don’t think we should be nannies. Our job is to make sure that we put these products out on the shelf and make the labeling clear…..
For the full interview, CLICK HERE