PepsiCo says it has innovations in the pipeline

PepsiCo says it has innovations in the pipeline

PepsiCo's CEO has said carbonated soft drinks may have just three years to win back US consumers before they abandon the category.

Indra Nooyi told an analysts conference yesterday (29 May) that the industry has a “once in a lifetime opportunity” to bring back “lapsed” CSD consumers. She added that PepsiCo is working on sweetener and flavour innovations that can “address the barriers to consumption”.

“We believe that if you let this go on too long, then in another three or five years the consumer will walk away from CSDs,” Nooyi said. “The new consumer has too many choices that they’re playing around with, but I think there is a once in a lifetime opportunity to bring the consumer back to CSD.”

Nooyi warned that consumption may never return to previously high levels, but said that demand for CSDs is still there.

“(Consumers) love carbonated soft drinks, they love the bubbles, they love the caffeine and they love the taste of cola,” she said.

In February, Nooyi said PepsiCo is developing new sweeteners and flavourings that could “alter the trajectory of the cola business”. The company has released no further information.

Nooyi, who was speaking at analyst Bernstein's Strategic Decisions Conference, sidestepped questions over a possible merger with US snacks group Mondelez International. However, she said: “Our belief is that we don't need any transformation M&A to accomplish our goals, and we are very happy with our portfolio and that’s how it's going to be.”

Last month, PepsiCo confirmed it had held discussions with activist investor Nelson Peltz's Trian Fund Management firm, after the businessman disclosed he has a US$269m stake in the group. Peltz also owns a stake in Mondelez, leading to speculation he intends to join the companies.