PepsiCo Shows Little Interest in Dropping Beverage Unit

Despite urging from investors, PepsiCo’s CFO has remained optimistic about Pepsi’s drink products
Staff Writer

Photo Sasabune Omakase Modified: Flickr/erin/CC 4.0

Looks like your Pepsi is safe...for now.

Despite investors urging that the company drop its drink division following falling profits, PepsiCo execs show no sign of giving up their signature soft drink any time soon.

Last week, reports came out that “activist investor” Nelson Peltz was urging PepsiCo to drop their underperforming beverage unit to focus on their successful Frito Lay snack division. He also suggested the company buy Mondelez, a snack company that owns favorites like Oreos.

But, according to CNBC, Hugh Johnston, the CFO of PepsiCo, said that PepsiCo as a whole is doing well enough to withstand the challenges that have come with falling soda sales. "PepsiCo as a portfolio is working so well right now,” he told CNBC. “The complexity of taking on an $80 billion acquisition, and somehow trying to do all of that integration, frankly will distract the business from doing what it is that we're doing right now, which is creating a lot of value for shareholders."

PepsiCo had a recently good earnings report, because of Frito Lay, but Johnson said ultimately, the blame falls on a cold and wet spring season, and when the weather picks up, so will soda sales. "When it's hot out, Gatorade sells,” he told CNBC. “When it's cold out, Quaker sells better. When it's a great summer, there's a lot of parties, Frito Lay tends to do really well. When it's cold and flu season, Tropicana does well."

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