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Healthy Beverage Innovation: PepsiCo leads the way

July 26, 2011 by Darrel Suderman — President, Food Technical Consulting

Healthy Beverage Innovation: PepsiCo Leads the way

PepsiCo is one company that believes in Return on Innovation Investment (ROII), and is facing the challenge head on! So what are they doing?

1. PepsiCo has set a business goal of doubling its "good for you" sales revenue from $15 to $30 billion by 2020, according to a recent article in the Wall Street Journal.

2. The company defined the product categories that it plans to develop innovative new products around. The Wall Street Journal describes the healthy-foods initiative as focused on dairy, juices, and products like oatmeal.

3. PepsiCo has committed investment dollars to support its business goal. Last year alone, PepsiCo invested $3.8 billion for a stake in a Russian dairy-products company, and increased its R&D spending $100 million from $388 to $488 million. That is putting action into your words and sends a message to employees and competitors that they are committed!

4.The company has also defined a "new product pipeline" with specific product targets. In general, most of the following products are described as "fortified-food" products. Those products include 24-gram six-packs of cookies, 10-gram spicy puffs made with rice, cornmeal and millet, and a 6.8-ounce non-carbonated drink called Gluco Plus that contains glucose, electrolytes and iron.

5. PepsiCo's new product development pipeline fills specific nutritional gaps that are causing young consumers to fall short of their physical and mental potential – iron and electrolytes, etc.

6. PepsiCo identified a targeted customer population in which to sell these products– adolescent girls. The products will be sold in a pilot program in some schools and villages in the southern state of Andhra Pradesh in India. To accomplish this goal, PepsiCo has hired a woman in each of the 84 villages targeted in Andhra Pradesh to sell cookies and Puffs. Manu Anand, chairman of PepsiCo India was quoted in the Wall Street Journal article as: "The question is: How do we create a new portfolio of products that can be targeted sharply to this segment."

7. PepsiCo is not only developing new products that meet customer hunger needs, but products that also improve health and are socially responsible at the same time.

Even though PepsiCo is just starting this "good for you" new product innovation process, it appears that it has also spent a lot of effort developing a well thought out business plan to guide the business.

The Food Innovation Institute now offers food innovation workshops and executive leadership training on food innovation at Johnson and Wales University in Denver, CO. For more information contact Dr, Darrel Suderman, President of The Food Innovation Institute at dsuderman@foodbevbiz.com (www.foodbevbiz.com), and Adjunct Professor of Product Development at Johnson & Wales.

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