PAI Partners

PepsiCo and PAI Partners join to optimise portfolio of juice businesses

PepsiCo has entered into an agreement with PAI Partners, a private equity firm specialising in the food and beverage sector, to sell select juice brands such as Tropicana and Naked across North America and an option to sell certain European juice businesses. This will result in combined proceeds of around $3.3 billion, while retaining a 39 per cent non-controlling interest in a newly formed joint venture.  Read more

Pepsico introduces flextime for staff

In recent months, Australian organisations have evolved with the onset of the COVID-19 pandemic demonstrating just how adaptive and resilient the Australian workforce is.
PepsiCo has always sought to be ‘people-centric’, implementing policies built around the needs of its people. Its latest policy, flextime, removes official start and finish times – allowing people to choose their work hours and balance personal responsibilities and lifestyle with work.
PepsiCo ANZ CEO Danny Celoni said this new policy allows people to build their work life around their personal needs and encourages everyone to embrace all of the flexible working options that are available to them.
“We completely recognise that a one size fits all work model does not suit everyone in our diverse organisation,” said Celoni. “Our commitment to fostering a culture of flexible working for all ensures we have the best people doing their best work every day.”
One employee who has already reaped the benefits of PepsiCo ANZ’s new flextime policy is CIO Brian Green. Being part of the IT department, Brian is often required to be online 24/7 to accommodate the broad range of time zones PepsiCo ANZ operates in meaning much of his workload begins after 5:00pm.
With the new flextime policy, Brian can stagger these hours to assist with later start and finish times, meaning his daily schedule now involves bug catching with his son around midday, and taking his daughter to soccer practice right after school.
“I am really fortunate to be working for a company that is able to acknowledge the needs of not just my role in IT but also my personal life,” Green said. “Time with your kids is something you are never able to get back so I’m enjoying my new weekday routine and taking full advantage of the flextime policy.”
PepsiCo ANZ’s leadership team believe that offering flexibility in the workplace is critical to attract and retain good talent. The flextime policy is just the latest in a string of well established diversity and inclusion initiatives designed to help people find a work-life balance that suits them.

Branding and supply chain: why they matter

Danny Celoni is the Australasian CEO of one of the most recognisable names on the planet – PepsiCo. Having more than 22 years’ experience in sales, strategising and marketing throughout the Pacific and Asian regions, he is in a good place to see where Australian brands fit. Not only in terms of names themselves, but perceptions, too.

“[I think] Brand Australia has a lot of equity with a lot of our brands,” he said at the recent Global Food Forum held in Sydney. “PepsiCo has a huge snack portfolio including the likes of Red Rock Deli chips and Twisties and we are seeing Brand Australia becoming more prominent. We are well placed from a value-add perspective. It’s all about quality, food security, consistency – they’re core elements that make Brand Australia prevalent.”

Appearing on stage with Celoni was Sir Rod Eddington, who, among other things, is the non-executive chairman of brewery giant Lion. A Rhodes Scholar who attended Oxford, Eddington is a strong believer in having big ties to Asia. His Grand Cordon of the Order of the Rising Sun awarded to him by the Japanese government in 2015 for his contribution to strengthening economic relations between Australia and Japan is proof of that. And although he is a champion of local produce, he is slightly less optimistic about Australia’s brand presence. He believes Australian food producers have a way to go in the branding stakes. He cites Australia’s neighbours across the Tasman, and a home-grown example, as a prime illustrations of how Australia should be positioning itself.

READ MORE: 7 risks in the food supply chain that compromise customer safety

“We have a long way to go on Brand Australia to be frank,” he said. “The Kiwis have done a brilliant job. The 100 per cent Pure New Zealand brand is a very good one.

“The part of Australia that is probably closest to being in the right space is Tasmania. Tasmania has built a reputation for itself, over a long period of time, not only as a producer of world-class wool, but of world-class seafood and vegetables. I think there is some real examples to be taken from Tasmania. As good as Australian food is, it still doesn’t have an overarching brand with the quality that the Kiwis have delivered.”

Eddington also made it very clear that the supply chain has to be up to scratch. If it’s not, then it doesn’t matter how high-quality your food or beverage is, you will make no inroads into some of the more fickle, but lucrative, markets.

“If you are exporting fresh and chilled products including cold foods, then supply chain is critical,” said Eddington. “An hour on the tarmac in the sun can destroy the product. As a company, we are really focussed on what supply chains are best and there are plenty of places in Asia where they are good. Japan is good. Hong Kong is very good as is Singapore. There are parts of China – especially where you have to trans-ship goods – where you may have a problem.

“There are other places in Southeast Asia where there are opportunities, but, as yet, their supply chains are not strong enough. And if their supply chains are not strong enough, you can’t risk your product because it will affect your brand. We are very much focussed on working with shippers and transport companies that can deliver certainty around cold store supply chain. It’s not only just for us. If you are selling sea food, fruit, vegetables, chilled meat into Asia – and that is where there is a substantial opportunity – then you need to have the certainty of supply chain.”

One up and coming country is Vietnam. While not at the standard it needs to be for Australian exporters, the country is making an effort to get the infrastructure in place so that it soon will be a gateway for Australian cold store exporters to land their goods.
“The Vietnamese are in the process of upgrading their supply chain,” said Eddington. “It is not as reliable [compared to some other Asian destinations], but it is a real opportunity for our businesses.”

He was also quick to point out that it wasn’t that long ago that all the bigger airports in Australia had the problem of not very good cold store supply chain facilities. He is confident that many countries around the world, including those in Asia, will see the benefits of a reliable cold store chain supply.

What about regional Australia, though? The majority of the country’s food is grown in regions, so why not set up cold store facilities at the local airports and export directly to overseas markets? Fair point, said Eddington. While there are some places that are starting to do that, there are roadblocks that need to be overcome.

“The thing about cold store supply chains is that they cost a lot of money,” he said. “You need the throughput and volume to make them work.

“There was a time when our major airports didn’t necessarily have high-quality cold supply chains and they do now. For instance, Cathay Pacific offers a freight service once a week, hoping to go twice week, to Toowoomba.

“There is an opportunity to exports vegetables and fruit out of that area to North Asia. There are opportunities in the regions, but you do need to pick your mark carefully.
“If you want to deliver high-quality goods to North Asia – freshness and reliability is key. That really means the big airports have to have the facilities.

“The other thing big airports need to have – and is a big advantage of Melbourne’s over Sydney – is no curfew.”

It not only Asia that is opening up to Australian produce. One United States success story of a value added product doing well overseas is the Australian developed – and now owned by PepsiCo – Red Rock Deli chip brand. Celoni said that the added value aspect of Red Rock helped PepsiCo get into the commodities space. Red Rock has opened a few doors in terms of categories that PepsiCo is trying to enter.

“[We] need to make ourselves indispensable, by growing categories,” said Celoni. “We need to front up to retailers and see how we can drive more penetration, more frequency – high average-weight-of-purchasing dollars.

“[PepsiCo] needed a product in the premium segment and our US colleagues talked about [Red Rock] and what it was doing from a category perspective. It was all about the increase in dollars per kilo, the brand, and the pack architecture that we were able to mobilise to create value and different price points. They saw an interest in it, so we sent some over and did some consumer tests. It resonated with some of the retailers and created value and off it went.”

And it’s not only what Celoni calls PepsiCo’s indulgent portfolio of products that it is looking to expand, but it has recently delved into the healthy snack market. Again, branding is the key, especially when trying to get into Asia.

Celoni makes no apologies that the sugar-rich fare PepsiCo is known for will still be the mainstay of its business, but they realise that category expansion is key to any successful business going forward.

“We do see opportunities in the health and nutrition space, in what we call adjacencies,” he said. “It’s growing in double digit and it’s a segment that is reaching the billion-dollar mark, certainly in the snacking space.”

PepsiCo has recently acquired Bare Foods, which produces baked fruits; Health Warrior, which makes nutritious snacks and bars; and Muscle Milk, a protein shake brand manufacturer.

He said the company has gotten rid of some of its arrogance by realising it can’t do everything itself. Thus the foray into the health food sector.

“We’ve looked for what I would call, ‘best-in-class manufacturers’ that can make quality products,” he said.

“And we thought about how we think about from a category expansion perspective in terms of capabilities.

“So, we entered into health nutrition [sector] with Sun Bites, and we are doing more work with Off the Eaten Path, which is a brand being launched by the retailers in the health and nutrition space. It’s all anchored in making sure we give our consumers the right choice. We will continue to do more of that because obviously that is what we are asking for at the moment.”

Both men agree that Australia is heading in the right direction with its food exports, but that maybe the sector as a whole can do a little bit more to make sure it is making the most of the opportunities available. Being organised is the key, said Celoni.

“It’s about getting the right pipeline and getting in on consumer needs…and making sure our supply chain footprint and all the work we do with our farmers [is sound],” he said. “Ninety-five per cent of our production for our locally made products are sourced in Australia.

“That will continue into the future. With the 500-odd farmers we work with either directly or indirectly, we see a real source of growth, but we have to get a lot more meticulous in the way we plan.”

PepsiCo expands plant-based range with Health Warrior acquisition

PepsiCo has acquired Health Warrior – a US-based company that makes plant-based products including nutrition bars and on-trend offerings.

The transaction will further expand the company’s nutrition portfolio to offer consumers additional options in an exciting growth category.

PepsiCo North America chief executive officer Al Carey said the company continues to position itself at the forefront of changing consumer preferences and trends.

“This acquisition helps us increase our presence in the nutrition bar category, which is an attractive growth space,” said Carey.

READ: Two new executives appointed at PepsiCo ANZ

Health Warrior was founded in 2011 by a group of college friends, Dan Gluck, Nick Morris and current CEO Shane Emmett.

The company makes products that contain plant-based superfood ingredients and are lower in sugar.

Health Warrior products are made from nutrient-dense, non-GMO and gluten-free ingredients.

Its current offerings include nutrition bars made with chia and pumpkin seeds, and other plant-based protein offerings like mug muffins and protein powder.

Emmett said the company is excited to join PepsiCo and continue to put nutritious options within reach of significantly more people.

“With a shared mission to help create healthy relationships between people and food, PepsiCo is the ideal partner to bring our nutrient-dense, plant-forward offerings to even more consumers and considerably accelerate Health Warrior’s growth.

“This is the whole reason we started the company,” said Emmett.

While Emmett will continue to lead the business from its current headquarters in Richmond, Virginia, this is PepsiCo’s first investment that will dock into The PepsiCo HIVE, a newly-created entity within the company focused on growing emerging, smaller brands.

PepsiCo North America Nutrition president, Seth Kaufman, said this will enable the company to continue building the Health Warrior brand at a deliberate and sustainable pace and to leverage its entrepreneurial expertise and talent to benefit its broader portfolio.

“Health Warrior is a nutrition-forward trailblazer that can provide great insight into high value categories and consumers while benefitting from our expertise and resources to bring plant-based nutrition to more people,” said Kaufman.

Two new executives appointed at PepsiCo ANZ

PepsiCo ANZ has appointed two new executives to its leadership team that bring extensive knowledge of the food industry.

Stepping into the role of senior sales director ANZ is Louise Baker, who was previously the sales director at Frucor Suntory.

She was also customer director at Goodman Fielder and spent 14 years in sales, marketing and category positions at Procter and Gamble in the United Kingdom.

“As a reputable company with many iconic brands in its portfolio, PepsiCo ANZ appealed to both my interests in shopper marketing and drive to expand the footprint of an FMCG company within its local market,” said Baker.

READ: PepsiCO, partners with companies, including Nestlé Waters, to develop bio-based bottles

“Having built a career on customer experience and sales, the sales director role at PepsiCo ANZ seemed like a natural fit and next step for me and I look forward to steering the sales team in a direction that will meet consumer demand for the long-term,” she said.

Dulcie de Koning has been appointed to the role of commercial strategy director ANZ.

She was previously employed at Procter and Gamble for 20 years, working in both Australia and the United Kingdom.

De Koning’s experience spans retail channels and categories and has previously included beauty and grooming, homecare and electrical.

“I’ve worked with leading brands to deliver sustained business performance in sales, customer marketing and strategy positions and look forward to doing the same at PepsiCo ANZ,” said De Koning.

PepsiCo ANZ CEO, Danny Celoni said he looked forward to welcoming the additional two talented individuals to the team and their input on current projects.

“PepsiCo ANZ is a vibrant business and we are in a strong position to continue to drive category-leading innovation and growth,” said Celoni.

PepsiCO, partners with companies, including Nestlé Waters, to develop bio-based bottles

The NaturALL Bottle Alliance is a research consortium formed in 2017 by Danone, Nestlé Waters and bio-based materials development company Origin Materials to accelerate the development of innovative packaging solutions made with 100 per cent sustainable and renewable resources.

PepsiCo has joined the alliance to advance the shared goal of creating beverage containers with a significantly reduced carbon footprint.

The Alliance also provides a progress report in its goal of developing and launching a PET1 plastic bottle made from bio-based material.

Launched in March 2017, the alliance uses biomass feedstocks, such as previously used cardboard and sawdust, so it does not divert resources or land from food production for human or animal consumption.

READ: Danny Celoni appointed CEO of PepsiCo ANZ

The technology being explored by the alliance represents a scientific breakthrough for the sector, and the Alliance aims to make it available to the entire food and beverage industry.

PepsiCo vice chairman and chief scientific officer Mehmood Khan said creating more sustainable packaging requires innovation through the value chain.

“Producing PET from sustainable bio-based sources that do not diminish food resources and are fully recyclable is a great example of such innovation and an important contributor to PepsiCo’s sustainable packaging program,” said Khan.

“Through our Performance with Purpose agenda, PepsiCo is committed to reducing the carbon impact of packaging in line with our goal to reduce absolute emissions of greenhouse gases by 20 per cent by 2030.

“Bio-based PET has the potential to reduce significantly the carbon footprint of our PET bottles, a huge contribution to our efforts in this area,” said Khan.

Origin Materials CEO John Bissell said PepsiCo is a welcome addition to the alliance because the the companies all share the goal of making renewable plastic a reality.

“Through the combined efforts of its members, the NaturALL Bottle Alliance is setting the bar for sustainability for an entire industry,” said Bissell.

1PET – Polyethylene terephthalate is the most common plastic in polyester family and is used in fibers for clothing, containers for liquids and foods, thermoforming for manufacturing, and in combination with glass fiber for engineering resins.

PET is also known as having one the most developed collection and recycling systems in the world, making it a key asset for the circular economy of plastics.

Nestlé Waters’ head of research and development, Massimo Casella, said the alliance has taken an important step in working together to tackle the challenges around plastic packaging.

“Developing 100 per cent bio-based PET is one way Nestlé is working to use more materials from sustainably managed renewable resources,” said Casella.

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