We bought Quaker Oats in 2000 because we had no food brand that could play in the morning. It was also clear that beverage habits were changing. Our own employees’ consumption was changing. It went from regular Pepsi to Diet Pepsi and Pepsi Max. Everywhere you looked, you could see that consumption of low-calorie, zero-calorie products was increasing.
How do you get a big multinational company to buy into such a dramatic change in strategy?
If the C.E.O. doesn’t feel the change, as opposed to just talking about the change, people will see right through it. So the first thing I had to do was make sure that whenever I talked to employees about it, I shared experiences, observations, data. I talked about water shortages in parts of the world. I would show them examples of plastic waste, the lack of recycling programs and what that could do to the environment. And I would talk about people's consumption of fat, sugar and salt.
We had town halls and invited the spouses of employees to come. At one in Egypt, a lady stood up and said, “My husband’s going to be mad I’m saying this, but I have a kid who’s 2, and I read every label, and I’m not willing to give my child all PepsiCo products.”
Plenty of people questioned the strategy. What made you stick with it?
Our board bought into the strategy. If your board is not on your side, it doesn’t work. But they said, “What you’re doing with the portfolio, what you’re doing with the whole environment and sustainability issue, what you’re going to do with the focus on diversity — this is the right way to move the company forward.”
And I told them: “This means that I’m not going to focus on beating every index. I’m going to focus on duration of returns, rather than level of returns for a short time.” And the board said, “Yes, that’s the right way to go at it.”
But if you’re really committed to health, why keep selling soda and chips?
Mountain Dew is a fantastic brand. It’s a great franchise. I’m not here to tell you what to eat or drink. My job is to give you a choice of products, between fun for you, better for you and good for you. I’ll give you nutritious products. I’ll give you low-calorie products. I’ll give you indulgent products.
I have to make sure that the good-for-you products aren’t more expensive than the fun-for-you products, and that the good-for-you products don’t taste awful while the fun-for-you products taste great. But if I make all the products ubiquitously available, priced reasonably the same and they all taste great, ultimately it’s a consumer choice. And if I put the right amount of advertising dollars between the whole portfolio, I’m letting the consumer decide.
