New Delhi: Indra Nooyi, the first Indian-origin global leader of PepsiCo Inc., on Monday said she was “especially proud of the great work” that her company has done in India, a market where the American food and beverage maker has struggled to grow in recent years. PepsiCo on Monday said that Nooyi will step down as CEO of the company, effective 3 October. Ramon Laguarta will succeed her.
“I’m especially proud of the great work we’ve done in India to transform our portfolio to include more nutritious products, working with and supporting thousands of Indian farmers, and providing an inclusive workplace in which our associates in India can bring their whole selves to work every day. That will not change,” Nooyi, 62, said in an e-mailed statement, a few hours after the US firm announced that she is stepping down.
Born in Chennai, Nooyi attended Madras Christian School, followed by Indian Institute of Management, Calcutta. She moved to the US in 1978 with a scholarship to study at the Yale School of Management. Nooyi joined PepsiCo in 1994 as head of strategy and was the chief financial officer before she took over as the chief executive in 2006.
The strategy to transform PepsiCo’s portfolio came three years after she took charge. In a speech in 2009, Nooyi had said, “Nobody’s going to remember you for delivering earnings to stockholders; they will remember you for the lasting impact you made on society.”
Nooyi had not said much about India until November 2013 when she visited the country for the first time after becoming PepsiCo boss. On 11 November 2013, PepsiCo said it will invest $5.5 billion in India by 2020, within weeks after PepsiCo’s rival The Coca-Cola Co. announced plans for a $5-billion investment by 2020 in India. “India has the potential to become the largest market outside the Americas,” Nooyi said in an interview then.
In the year ended 31 March 2014, PepsiCo India had reported a loss of ₹ 280 crore on revenue of ₹ 7,217 crore, according to its fillings with Registrar of Companies (RoC). Since 2006, the company had consistent high double digit growth in revenue, and had ventured into food, and snacks that had instant success.
The trajectory, however, did not last long. Over the next few years, its losses jumped, and by the fiscal year ended 31 March 2017, its revenue dipped to ₹ 6,540 crore, less than its 2012-13 figure of ₹ 6,994.8 crore.
India’s contribution to global business has remained unchanged at around 1% in the past decade. The company lost market shares across categories and brands, barring a few.
For PepsiCo, the Indian business continued to suffer while global revenue grew by around 80% to $63.5 billion during the 12 years of Nooyi’s leadership. Besides, there has been changes in leaderships in India. During Nooyi’s 12-year tenure at PepsiCo, the Indian unit changed fourth chief executive officers.
Nooyi, however, has a different take. “After more than a decade at the helm and nearly a quarter of a century with PepsiCo, now feels like the right time to pass the baton, as we are well-positioned for continued success. Over my time as CEO, we’ve focused not only on the next quarter, but the next year and the next decade, rewarding shareholders while understanding that our success and the success of the wider world are inextricably bound together,” Nooyi added in her e-mailed statement.
PepsiCo’s India’s immediate past chief executive D. Shivakumar did not respond to messages seeking comments. Ravi Jaipuria of Varun Beverages Ltd, the largest bottling partner of PepsiCo India, also did not respond to calls and messages seeking comments.
While Nooyi expressed confidence in her successor Ramon Laguarta, a major change in the company’s prospects in India under the new leader seems unlikely, despite the country being one of the world’s fastest growing consumer markets.