PepsiCo ramps up healthy products innovation

PepsiCo is looking to introduce a raft of healthy products following the creation of a new division dedicated to the development of “nutritious” food and drinks.

The company says the “Global Nutrition Group” will allow it to deliver “breakthrough innovation in the areas of fruits and vegetables, grains, dairy and functional nutrition”.

PepsiCo claims the Chicago-based group will help grow its nutrition businesses – which include the Quaker, Tropicana and Lebedyansky brands – from $10bn to $30bn by 2020.

Indra Nooyi, PepsiCo chairman and CEO, says the market potential for healthier products is “significant”.

“We have been actively ramping up our innovation capabilities and developing strong partnerships with the scientific community, including with universities and research institutions around the world.

“I believe we are well equipped to deliver authentically nutritious products advantaged by science in an accessible and affordable way to consumers globally,” she says.

The commitment is in line with the move announced by PepsiCo’s UK division in March to move firmly into the health space. The business pledged to make 50% of its savoury snacks baked or include “positive nutrition” by 2015.

The company’s efforts have been criticised by some public health campaigners, however, which have questioned the company’s commitment to promoting healthy lifestyles when it markets products such as Walkers and Pepsi that can be high in fat and sugar.

PepsiCo announced the creation of the nutrition group as it reported revenue increased 40% to $15.5bn in the 12 weeks to 4 September. Pre-tax profit rose 15% to $2.6bn.

Nooyi says that the strong performance was achieved despite a “macroeconomic environment that continues to be challenging”.

“This reflects our steadfast commitment to managing both the short-term
and long-term, by driving balanced growth across our portfolio while making the right strategic investments,” she says.

Gains across snacks and drinks helped drive revenue from its European businesses up by 55% in the period.

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