Beverage Industry

PepsiCo forms new bottling unit

October 6, 2009

PepsiCo announced it will form a new bottling unit based on its planned acquisitions of its two largest bottlers, the Pepsi Bottling Group (PBG) and PepsiAmericas (PAS). The new unit will become effective upon closing of the mergers, and will be called PepsiCo Bottling North America (PBNA). Eric J. Foss, chairman and chief executive officer of PBG, will head the new bottling unit, reporting to PepsiCo Chairman and Chief Executive Officer Indra Nooyi.
 
PepsiCo says PBNA will comprise all current PBG and PAS operations in the United States, Canada and Mexico, and will account for about three-quarters of the volume of PepsiCo's North American bottling system. Independent franchisees will account for the rest.
 
"PBNA will be separate from the brand-oriented PepsiCo Americas Beverages (PAB) unit, which will continue to oversee independent bottlers and Gatorade and Tropicana operations," the company said in a statement. "The separation will allow greater focus for both units and enable PBNA to continue producing and distributing 'allied brands' not owned by PepsiCo."
 
Current PBG and PAS operations in Europe and Russia will be managed by PepsiCo Europe when the mergers are completed.
 
"This structure will provide two very important benefits," Nooyi said. "It will allow us to continue the critically important work we began last year to refresh our core soft drink brands. At the same time, it will enable us to maintain the operating focus we need to capture the strategic opportunity created by our bottler mergers, particularly in North America."
 
In order to facilitate a smooth integration of the bottling businesses, PepsiCo says it will establish a special advisory board. Among its members will be: Eric Foss; Indra Nooyi; Robert Pohlad, chairman and chief executive of PepsiAmericas; and Craig Weatherup, founding chairman and chief executive officer of the Pepsi Bottling Group, who retired in 2003.