08 Jul 2011 Memo to Pepsico from its investors: Hello! You’re in the soda business

Investors and analysts are repoprtedly souring on Pepsico’s much-publicised healthy products initiative. Given that Pepsi’s stock has underperformed that of rival Coke, they’re suggesting the company should put more resources into its unhealthy — yet immensely profitable — products like soda and Cheetos.

Some of Pepsi’s independent bottlers are equally annoyed at the direction Pepsi’s savvy, mediagenic, forward-thinking CEO Indra Nooyi has taken the company: “Is she ashamed of selling carbonated sugar water?” asked Pat Weinstein, the incredulous owner of Weinstein Beverage in Seattle.

Such criticism illustrates the tremendous perils that publicly-traded processed food giants face in trying to reorient any significant part of their business around healthier fare. Investors want to see a company’s cash cows continually milked, and they don’t care if those cows are contributing to a national health crisis…..

BevNet: Read more

More on the topic from Marion Nestle’s blog, Food Politics…

“As I keep saying, public concerns about obesity put food companies in an impossible dilemma.  Even if companies want to produce healthier products and stop marketing to kids, they can’t. If they do, they lose sales.

“Case in point: PepsiCo. Its investors are unhappy that the company is pushing its “healthier-for-you” foods instead of doing what it is supposed to: pushing the far more profitable “fun-for-you” products like PepsiCola, Gatorade, and Cheetos…..

Food Politics: Read more