Aficionados of marketing jargon have a veritable trove of phrases to savor in the transcript of PepsiCo CEO Indra Nooyi’s upbeat chat with analysts Wednesday that gives us “the headlines” on its “stepped-up brand investment programs” and “heightened focus on innovation, productivity and execution….”
There are old standbys like “cluttered,” “breakthrough” and the use of “grow” as a transitive verb, as if you could “grow beverages” and volume share the way you increase hair volume (or not). But there are also some delicious newer products –- at least to us -- to roll around the tip of you tongues.
How about "cull the tail"? Or "tailpipe metrics"? Alas, since this earning report was not a huge Twitter event, these phrases will need a little help to catch on the way “binders full of women” has. But before we build our “portfolio” (which was used 26 times during the call) of examples of how things were said, let’s get the bottom line of what was said out of the way:
“PepsiCo Inc.'s soda brands continued to gain share in North America in the third quarter, a key sign that the snacks-and-drinks giant is making some progress in its turnaround plan to make up ground on rival Coca-Cola Co.,” Paul Ziobro reports in the Wall Street Journal.
It “reported a 4.9% decline in third-quarter earnings due to higher costs, more spending on advertising and unfavorable currency translation. Foreign-exchange rates and refranchising of territories in China and Mexico also held back overall sales but, excluding those items, PepsiCo's organic sales rose a solid 5%, led by 10% growth in Asia, the Middle East and Africa and 13% growth in its Latin America Foods group.”
Okay, break’s over.
Here’s a tip if you’re in the media and want some of that PepsiCo advertising $$$: Turn around and look those consumers in the eyes. “From a brand perspective, we continue to increase the level of effectiveness of our advertising through our global campaigns by directing more of our spending to consumer-facing media.”
Make no mistake, these “investments in brand building, innovation and execution are working well and enhancing both our competitiveness and capability for margin-accretive, sustainable growth in the future.”
Overall, the company is “focusing our portfolio down to 12 muscular brands,” Nooyi says. As far as Frito-Lay goes, be assured that it wants to “crack the code on the value business.”
Have you noticed the kudzu-like spread of the phrase “So the …” to kick off the response to question such as: “I was hoping for more detail on your progress so far with the Tingyi alliance …”?
“So the Tingyi deal was closed in the early part of second quarter,” Nooyi responds, going on to explain why the company has yet to “reap the benefits of the increased Tingyi manufacturing footprint.” (The strategic alliance with Tingyi, one of the major food and beverage companies in China, was first announced last November.)
On the murky phrases front, how about “inventory outage,” which is used to partially explain why Gatorade’s “performance was off this quarter.”
Other goodies, which also tip more toward the MBA side of the “what-was-that-again?” scale, include:
If you thought we were going to leave you hanging on “cull the tail” or “tailpipe metrics,” fear not. In response to the last question of the morning –- which is about how Pepsi measures the effectiveness of its “incremental advertising spend” (good phrase, Damian Witkowski of Gabelli & Company!), Nooyi responds, in part:
“And then we're also making sure we're investing more in the 12 brands and slowly start to cull the tail. So we are making progress on that and we track it almost on a monthly basis. From a tailpipe metric, it's brand equity. Now typically, brand equity scores take 12, 18 months to really show improvement, sustained improvement…”
Now that that’s clear (if not, there’s a lot more verbiage on “this virtuous circle,” at the very end of the transcript), we hope you leave all these behind for a couple of days and enjoy “a 360-degree activation” of the weekend.