Three worlds

Dressed in purple East-meets-West-styled blouse, long straight gray skirt and with her short hair parted on the side, PepsiCo CEO Indra Nooyi held a press conference in China on November 3. It was her second meeting with Chinese media since assuming the CEO position in October 2006.

Within 40 minutes, she had crisply answered over 20 questions with brief, to-the-point replies. Though some questions were concerned the global economic slowdown, PepsiCo's not-good-enough third quarter report and recent job-cuts, there was a smile on her face from the beginning to the end.

One positive task of Nooyi's four-day trip to Beijing (she lives in the United States in Greenwich, Connecticut) was announcing PepsiCo's new investment plan in China - $1 billion over the next four years for production capacity expansion, research and development (R&D), sales force strengthening, as well as brand building, which implies PepsiCo's strategic focus will be tilting increasingly towards emerging markets.

Nooyi, 52, has been regarded by observers as a re-designer of PepsiCo over the last decade, turning the Fortune 500 company from a complex of fast food, beverage and snack businesses and soda pop and chips manufacturer to a world leader in noncarbonated beverages (bottled water, sports drinks, and teas) and corn-derived snacks. It's a company that is shifting from emphasizing "fun for you" food to a producer promoting "better for you" and "good for you" categories.

Now, amid the economic slowdown Nooyi is leading the company to further exploit the emerging markets, global growth engines for the next decade such as China and, of course, her native land - India.

As chairman, president and CEO of Starbucks Coffee Co, Howard Schultz says, Nooyi is a "world-class leader".

"Her sharp strategic mind, tremendous market insight and humanitarian contributions all combine to make her a rare executive among the global corporate giants," he says. He has been cooperating with Nooyi for more than 10 years, since Starbucks and PepsiCo began a joint-venture partnership to market and distribute ready-to-drink Starbucks products.

It's true that she is rare: a native Indian top leader for a US-based transnational company; a female CEO of a Fortune 500 company - only the 11th around the world so far; she has been named the most powerful woman in business by Fortune Magazine for consecutive three years and one of the 100 most influential people in the world by Time magazine this year.

Strategic thinker

Nooyi's predecessor, Steven Reinemund, calls her a "larger-than-life" leader. Insiders say she is strategic, decisive, insistent, inspiring and upbeat.

Entering PepsiCo in 1994, Nooyi has been directing the company's global strategy and is the primary architect of PepsiCo's restructuring.

In 1997, under Nooyi's suggestion who was the company's corporate strategy and development vice- president then, PepsiCo spun off its restaurant fast food empire of Pizza Hut, Taco Bell and KFC, in order to be more focused. It was not a small move, since it shrank the $31 billion company by a third.

She then championed the acquisition of US juice brand Tropicana for $3.3 billion the following year and later the $14 billion acquisition of food producer Quaker Oats Co, both of which gave PepsiCo some brand names that could help change its reputation as a sugary soda and salty snack manufacturer.

The healthy drink and food transfer and overseas market extension has worked for PepsiCo's growth. Since 2000, the company's revenue has nearly doubled. The company's stock has more than doubled since 2003 and now hovers around $70 a share, up about 10 percent.

Nooyi has been engaged in transforming PepsiCo to a healthier food company, not only because she herself is a vegetarian who for years has been talking about the importance of "gut health", but also due to the market needs.

As CEO she has been able to stick to her plans for change, which calls for gradually shifting the percentage of "better for you"and "good for you" snacks to 50 percent, up from 30 percent, and widening the product portfolio with grains, nuts and fruits. Last year PepsiCo spent $1.3 billion on acquisitions like Naked Juice, a California maker of soy drinks, juices and smoothies.

The efforts have been rewarded, as PepsiCo commands half the US noncarbonated beverage market now about twice Coca-Cola's share, according to Beverage Digest. And its share of its healthy snack business is increasing.

Those merger and acquisition strategies might be thanks to her background with the Boston Consulting Group during 1984 to 1990, her first job in the US and where she directed international corporate strategy projects.

Her idea for expanding PepsiCo's overseas business might be attributed to her Indian background, which leads her to pay more attention to markets such as India and China, and to look at the world with a more globalized view, than her homegrown American counterparts, says vice- general manager of Shanghai MEGI Consulting Firm Ma Bin, who has been studying the global beverage market for over a decade.

PepsiCo's international business grew 22 percent last year, tripling the rate of its domestic US sales, meanwhile, it contributed 40 percent to the total revenue at $39 billion.

But Nooyi notes: "I don't know if my Indian background alone was a help for me to operate PepsiCo I think in today's world, if you want to run a large multinational company, you have to be a global citizen, you have to understand the world.

"In my case, it helps definitely, but a lot of my colleagues understand the market as well, so I wouldn't say it's only an Indian background that helps."

The CEO recently created a new motto "Performance with Purpose", which fundamentally concerns PepsiCo's development model as balancing the profit motive with making healthier snacks, for a net-zero impact on the environment. Ma describes it as the new business structure - sustainable development - for PepsiCo in the next decade.

Humanitarian

PepsiCo's business performance had been optimistic for years, and the latest quarterly report seems somewhat gloomy. From June to September, net profits of the food and beverage giant amounted to $1.58 billion, down 9.5 percent by a year earlier, while Coca Cola's report shows, from May to August, its net profit was $1.89 billion, up 4 percent from last year's $1.65 billion.

In response, PepsiCo announced it would cut 3,300 staff and close six plants, most in North America, to save $1.2 billion within three years.

Nooyi claims that the reports of PepsiCo and Coca Cola are not comparable due to different reporting time and accounting standards. "Our performance is excellent, (given the global slowdown), we have achieved earning per share growth of 6 percent," she adds.

But the CEO admits that the fact that 3,300 members would be leaving the "PepsiCo family" made her sleepless for two to three weeks before the decision was made. "I was awake for whole nights hoping I would not have to do that," she recalls. "The market is going down, we have nothing to do with it."

Nooyi is family-oriented and sees PepsiCo as a family for all its employees. She remembers celebrating birthdays with colleagues; she sings karaoke, one of her hobbies, with employees around her; she chats with female employees about household concerns and is concerned about the career development, health and happiness of PepsiCo workers enough to initiate a talent sustainability program. But as a CEO and chairwoman she is also responsible to the company's shareholders and had to make the decision to let 3,300 people go.

Nooyi's family values go back to her childhood and Indian tradition. She grew up in southeastern coast of India and is a daughter of an accountant and a stay-at-home mother, who always encouraged Nooyi and her sister to do things aggressively and consistently.

As a Hindu, Nooyi attended a Catholic school and was active at debating, playing cricket, and playing guitar and even organized a rock band and still plays electric guitar when time permits.

She collected masters' degrees in business from the Indian Institute of Management in Calcutta and the Yale School of Management and worked previously with Johnson & Johnson and Mettur Beardsell Textile Co.

The mother of two daughters, 24 and 14, Nooyi says "being a CEO is a very lonely job. My problem is that in the office, I am a CEO. At home, I am not a CEO", says Nooyi, explaining that she has to be a mother and a wife, and it's very hard to fill these roles and do them very well.

"Sometimes, I cannot be a good mother, or cannot be a good wife. But in the end, this is a choice I made, so I just live with it and I get over it," she adds, still smiling, but obviously with some regret in her eyes.

Though the press conference was stretched out and the global CEO's schedule was busy, the wife and mother took the time to end it by going around the conference room to shake hands with everybody with a sincere smile on face, saying "thank you".

(China Daily 11/10/2008 page12)