Focus - CAGNY 2011: PepsiCo hails Wimm-Bill-Dann "slam dunk"
PepsiCo has said that it is “very excited” about its purchase of Wimm-Bill-Dann
PepsiCo has used the CAGNY investment conference in Florida to emphasise the benefits of its acquisition of Russian dairy business Wimm-Bill-Dann, with one executive labelling the deal a "slam dunk".
PepsiCo secured its acquisition of a majority stake in WBD earlier this month and, speaking at CAGNY yesterday (24 February), Zein Abdalla, president of the company's European business, said the deal "ticked" four boxes - category growth, the potential of the market, brands and the ability to "add value" to the business.
"Russia is clearly an emerging market with very high growth potential, but it is also a gateway to 400m consumers when you look at the republics around it and the other European countries," he said.
Abdalla also highlighted WBD's "wonderful brands, fantastic manufacturing facilities and a tremendous innovation pipeline". He said: "We are going to learn a hell of a lot from this business in terms of the way it runs."
He also said that PepsiCo would be able to "add value" and also explained that the acquistition would give the company "an innovation pipeline" that it can take into emerging markets.
"Normally, when you get excited about an acquisition you tick two out of all of those four. We are ticking all four ...that is when we use phrases like home run, slam dunk, so yes we are very excited about it," he said.
The WBD acquisition will broaden PepsiCo's exposure to developing markets. PepsiCo CEO Indra Nooyi told CAGNY that, in five years, PepsiCo's sales in emerging markets had risen from 21% of total group sales to 31%.
Speaking about the firm's North America beverage business, PepsiCo CEO Indra Nooyi brushed off suggestions that the firm might be losing market share to its major competitors.
"We have a very good beverage business in the US," Nooyi said. "There has been some noise about our position and performance. We have a big, highly profitable beverage business in North America with a very strong beverage portfolio. In measured channels, we have volume and value leadership and we did gain volume share in 2010...that is driven by our strength in the portfolio."
She added: "The overall category has been sluggish for some time. We have some opportunities to address. We have done major work over the past two years to strengthen our brands and we are starting to see traction. Consistent with the positive trends we saw in 2010 we are seeing impressive improvement in brand growth. In almost every instance we have seen gain and that gives us confidence and that it is paying off."
Nooyi said that the company will continue to drive the business forward through innovation, particularly in health, more appealing packaging and the use of new and more traditional media.
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