PepsiCo Likely To Up Investment In Soft Drink Brands

  • January 13, 2012

A months-long internal strategic review of 2012's business plan by PepsiCo's directors and management is likely to result in an increased marketing push for its soft drinks business, reports the Wall Street Journal.

PepsiCo will announce the results of the review in early February.

Speaking on behalf of the board, independent director James Schiro told WSJ that PepsiCo's board supports CEO Indra Nooyi and the management team.

Some investors and analysts contend that Nooyi has overemphasized the development and marketing of healthy beverages and snacks at the expense of PepsiCo's core soft drinks business. Soft soda sales have contributed to missed profit targets, and the company's stock is down 1% over Nooyi's five-year tenure.

Some also have been pushing for PepsiCo to split up. That scenario is unlikely, although the board has looked at this option, according to WSJ.

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PepsiCo has already been ramping up marketing for its soft drink brands, including the 2011 launch of the first new Pepsi TV campaign in three years, and analysts told WSJ that they expect the company to up marketing investment by $400 million to $500 million this year, with most of that focused on North American beverages.

However, those investments are likely to be offset through "sharp cost reductions," which are likely to include some job cuts, WSJ reports.

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