On Indra Nooyi’s last day as PepsiCo’s chief executive, the beverage maker reported third-quarter earnings that exceeded expectations. At the same time, the company saw rising demand for its beverages, such as Gatorade, cola and teas, CNBC reported.
For years, Nooyi had experienced pressure to spin off or sell PepsiCo’s beverage business, as the line had reportedly seen slower growth than the company’s snacks, such as Frito-Lay and Tostitos chips. At the same time, PepsiCo’s beverages faced competition from startups as well as slowing sales of carbonated beverages.
PepsiCo did, however, put marketing dollars toward its Pepsi, Mountain Dew and Gatorade beverage brands. The company reportedly saw some results, as its beverage business in North America experienced 2.5 percent in organic growth. By contrast, organic growth declined by 1.5 percent in the last quarter.
The news comes as after 12 years – and a recent spate of run-ins with activist investors – Nooyi will step down from leading the food and beverage firm, it was reported in August. She will be succeeded in the role by Pepsi President Ramon Laguarta as of Oct. 3. Nooyi will remain as chairman until early 2019.
Since Nooyi took the helm, Pepsi has seen its stock rise 75 percent cumulatively, less than the SNP, which picked up 112 percent overall. They also trailed their rivals at Coke, which added 108 percent during the same time period. Net revenue climbed from $35 billion in 2006 to $63.5 billion last year.
Nooyi has also experienced difficulty with activist investor Nelson Peltz, who was looking for Pepsi to split its beverage and snacking businesses. After a two-year struggle, Peltz backed off in 2016 and exited the firm. Nooyi was a strong advocate of keeping the brands together, which she believed gave the firm better leverage over retailers.
In a statement, Nooyi said, “PepsiCo today is in a strong position for continued growth with its brightest days still ahead.”