PepsiCo completes acquisition of two largest Pepsi bottlers

March 1, 2010
/ Print / Reprints /
ShareMore
/ Text Size+

PepsiCo, Purchase, N.Y., has acquired two of its largest bottlers for $7.8 billion, boosting its annual revenue to nearly $60 billion and making the company the largest food and beverage business in North America, it said.

The company will combine The Pepsi Bottling Group Inc. and PepsiAmericas Inc. bottling operations under the name Pepsi Beverages Co., said Indra Nooyi, PepsiCo’s chairwoman and chief executive officer.

“With the completion of this acquisition we will have a unique set of strategic advantages,” Nooyi said. “Clearly, we can pair our snacks with our beverages in the marketplace to provide unique offering to retail and food service customers. Eighty percent of our North American sales and distribution system is now under one roof and this will enable us to realize greater operating efficiencies and speed to market.”

Eric J. Foss, previously chairman and chief executive officer of Pepsi Bottling Group, will lead the new operation as its chief executive officer, Nooyi says. Massimo F. d’Amore will be chief executive officer of PepsiCo Beverages Americas, which is composed of Gatorade, Tropicana and Latin America Beverages. The company will consolidate The Pepsi Bottling Group and PepsiAmericas in Europe into PepsiCo Europe, which will be led by chief executive officer Zein Abdalla.

The acquisition of the two bottling companies will open up more opportunities for joint promotions, product bundling and shared display space, Foss said. For example, the company could pair its Frito-Lay snacks with beverages in the marketplace.

“One of the things you’ll see us do is really be able to unlock The Power of One,” he said. “All of those, I think, are big opportunities that you’ll see us activate very quickly in the transition.”

“The Power of One” is how the company will refer to its ability to leverage the abilities of its entire enterprise, Nooyi said. Retailers will see a streamlined supply chain and faster speeds to market for innovations, Foss said.

Foss also said he does not think bringing two large bottlers under the umbrella of PepsiCo will alienate independent franchise bottlers.

“I think one of the things that hopefully they’ll view as a result of this deal is that at the end of the day, myself and a lot of the leadership team on Pepsi Bottling Co. are bottlers,” he said. “So we’re one of them and we now have a big seat at the table. I would expect that the relationship would just get better as a result of that.”

Acquiring Pepsi Bottling Group and PepsiAmerica, which distribute some brands for Dr Pepper Snapple Group Inc., Plano, Texas, will not affect the bottlers’ business with DPSG, Nooyi said.

“The bottling system manages the relationship with Dr Pepper completely separately than the relationship they manage with the franchise company, which is the Pepsi Beverages,” Nooyi said. “They decide what to put on display, how to take this to the marketplace … We want to make sure the bottling company continues to operate business as they have. There’s no reason for us to even see the marketing plans for the Dr Pepper business because it’s not relevant to what we’re doing.”

 Did you enjoy this article? Click here to subscribe to Beverage Industry.  

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

Wine Riot - Chicago

Second Glass hosted Wine Riot in Chicago on May 2 and 3. Wine Riot offered attendees an all-access pass to hundreds of new wines as well as multiple educational sessions about different wine styles and varietals. (Photos by Jennifer Haderspeck)

6/25/14 2:00 pm EDT

Crafting growth: A look into the bourgeoning craft beer market

Learn how the beer segment is performing and where it is heading, what to consider before expanding your markets and innovations that are captivating consumer audiences.

Podcasts

Maintaining beverage dispensing equipment

Iuliana Nita, Saint-Gobain Performance Plastics global marketing manager of food and beverage, offers her insights about ensuring sanitary performance of beverage dispensing equipment in foodservice applications. She also will offer some tips about choosing the right kind of tubing to handle acidic beverages.

Beverage Industry Magazine

BI July 2014 cover

2014 July

The July 2014 Beverage Industry includes a cover story on the 2014 State of the Industry, as well as articles about PepsiCo Americas Beverages, Rooibee Red Tea kids line, and more. Check it out today!

Table Of Contents Subscribe

Beverage Insider eNewsletter

Are you an Insider? Subscribe to Beverage Industry’s weekly e-newsletter to receive news headlines, new product information and magazine highlights.   

Best Beverage Categories

Which beverage category will perform the best in the second half of 2014?
View Results Poll Archive

THE BEVERAGE INDUSTRY STORE

cleaning-in-place-dairy-foo.gif
Cleaning-in-Place: Dairy, Food and Beverage Operations, 3rd Edition

This book addresses the principles of cleaning operations, water supply issues and the science of detergents and disinfectants.

More Products

Webinars

Beverage Industry Webinars are an easy, effective and convenient way to get educated and informed on the latest industry trends and topics. All Webinars are FREE unless indicated. For more information, check out our Events page!

STAY CONNECTED

facebook40 twitter    youtubelinkedgoogle+ icon 40px