Turning PepsiCo into the "most health-oriented corporation in America."
With lawsuits being filed against fast-food restaurants, and school districts beginning to ban soft-drink sales and junk food next on the list, Pepsi is attempting to overhaul itself according to this Wall Street Journal story (subscription required):
Now fast-food chains and snack makers are launching defensive maneuvers. Earlier this month, McDonald's Corp. announced it would take some of the unhealthy oils out of its french fries. And PepsiCo is developing its healthier snacks.
By doing so, the company is tampering with its biggest driver of growth. Frito-Lay alone accounted for just over two-thirds of PepsiCo's profit last year of $2.66 billion. Though slowing lately, the unit's strong growth in operating profit -- 10% in North America last year -- has helped PepsiCo outshine Coca-Cola Co. in recent years despite trailing the Atlanta company in beverage sales.
...The answers are coming in fits and starts. PepsiCo executives are still trying to define a "nutritious" snack. (Their current answer: servings containing no more than 150 calories, five grams of fat -- including one gram of saturated fat -- and 250 milligrams of sodium.) They're starting to work on the same thing for beverages. Among the questions: Is a "juice drink" -- which isn't 100% juice but may have reduced calories -- a "nutritious" product?
Mr. Reinemund says the trend is clear: More consumers are concerned about nutrition, and "we need to be prepared to deal with it." Already, low-fat snacks such as baked potato chips and pretzels account for 20% to 25% of Frito-Lay's sales. What's more, sales volume of such products is up about 20% so far this year, reflecting a growing desire by some consumers to cut back on fat and calories.