Pepsi CEO Steps Down After 12 Years

Aug 6, 2018
Originally published on August 6, 2018 4:52 pm
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PepsiCo's long-serving CEO and one of corporate America's most high-profile female and minority leaders is stepping down. After a dozen years at the helm, Indra Nooyi says she'll give up her CEO title in October and complete her role as Pepsi's chairman early next year. NPR's Yuki Noguchi has this profile on how Nooyi broke the mold.

YUKI NOGUCHI, BYLINE: Nooyi has been on Fortune magazine's list of Most Powerful Women for 18 of the last 20 years. Last year, she ranked number two. Yet growing up going to Catholic school in India, Nooyi told Freakonomics Radio earlier this year she saw her future unfolding differently.

(SOUNDBITE OF RADIO SHOW, "FREAKONOMICS RADIO")

INDRA NOOYI: Somebody who was going to be a firebrand and make trouble, and the CEO of PepsiCo in the United States of such a global company - absolutely not.

NOGUCHI: Nor did many people think she was headed for the corner office. Marketing consultant Allen Adamson has worked with Pepsi. He says she was an unconventional choice.

ALLEN ADAMSON: One, she was in finance at a marketing-driven company. Two, she was from outside the U.S. in a very U.S.-centric organization structure. And three, she was a woman in a very male-dominated business.

NOGUCHI: Adamson says all that worked to her advantage. Nooyi, who was in a rock band in college, often wears Indian saris. She pushed Pepsi to expand internationally while changing its product line at the same time.

ADAMSON: The biggest challenge has been that the company - no pun intended - was addicted to unhealthy, sugar-laden snacks.

NOGUCHI: Nooyi helped shift that, and the stock price benefited by more than doubling under her leadership. But Nooyi took over at a dicey time. Within months of her taking the helm, the U.S. financial markets collapsed. The two main pillars of Pepsi, salty snacks and soda, were under siege as consumers and regulators alike demanded healthier options. And her early focus on healthier products met with stiff opposition from insiders and shareholder activists. As she told Freakonomics, people questioned why she was undermining Pepsi's cash cow.

(SOUNDBITE OF RADIO SHOW, "FREAKONOMICS RADIO")

INDRA: Why should we change our company that's been so successful for a future we don't quite understand? And so, one, I had to paint the future in a very personal way. I mean, I had to use our own employees to say, look; your own eating and drinking habits are changing.

NOGUCHI: Her harshest critic was billionaire shareholder Nelson Peltz. Four years ago, he pushed Pepsi to spin off its snack business, a move Nooyi successfully resisted. Surprisingly, she did not resent Peltz or his efforts.

(SOUNDBITE OF RADIO SHOW, "FREAKONOMICS RADIO")

INDRA: We studied every chart, every idea and had multiple conversations with him because at the end of the day, we viewed him as free consulting.

NOGUCHI: Nooyi has said her heaviest lift at Pepsi was implementing cultural change. She hired a doctor as chief science officer to put health and nutrition front and center. She pushed for research on everything from designing more appealing packaging to putting pulp fiber back into orange juice. These were the kinds of changes, says Motley Fool analyst Alyce Lomax, that helped Nooyi make her mark.

ALYCE LOMAX: In many things, she's been very much ahead of the curve over the last 12 years of her tenure, which I truly appreciate, you know, that - knowing that we do need more diverse companies and more diverse managements. I think she has been a wonderful role model.

NOGUCHI: As successful as she's been, she emphasizes it came at a personal cost. Working nearly 20 hours a day every day of the week meant sometimes having her daughter sleep under her desk. She told an audience at the Aspen Ideas Festival in 2014 she learned to cope, but her husband sometimes complained of being at the bottom of her priority list. Her reply...

(SOUNDBITE OF ARCHIVED RECORDING)

INDRA: There are two ways to look at it. You should be happy you're on the list.

(LAUGHTER)

NOGUCHI: Yuki Noguchi, NPR News, Washington.

(SOUNDBITE OF COLLEEN'S "HOLDING HORSES") Transcript provided by NPR, Copyright NPR.