Source :NEW DELHI:Ratna Bhushan & Chaitali Chakravarty, ET Bureau, Nov 9, 2010, 01.51pm IST
Indra Nooyi coyly suggested that she has not been made a job offer as Ratan Tata's successor while simultaneously seeking to preserve an aura of mystery around talk linking her to the top job at one of India's most respected conglomerates.
"If Ratan had asked me, it would have been difficult to trade a great job for another great job," the chairman and chief executive of PepsiCo told ET in an interview on Monday, implying that no offer had been made and prompting the question: "You mean to say Ratan Tata never offered you a job?"
Pressed thus, she responded that she "will never ever answer that question either in the positive or in the negative", and in the process raised more questions than answers.
Long speculated as one of the top names in an imagined list of candidates qualified to lead the country's oldest and most global conglomerate because of her Indian roots and international profile, Ms Nooyi, 55, nevertheless lavished praise on the salt-to-software Tata group.
"All that I can tell you is that the Tata group is a phenomenal company. It is a nation-building company. I don't think there is any country in the world that has a corporation like the Tatas in every work that they do. I have great respect for the Tata group," said Ms Nooyi, who was born and raised in Chennai.
The IIM-Kolkata and Yale alumna also said her work at PepsiCo, which she has headed for nearly four years, remains undone. "I love my job. I love being the CEO of PepsiCo... My job as CEO, PepsiCo, is not done."
The Tata Group is not the only one she has been linked with. Earlier this year, there was speculation that she could join President Barack Obama's administration as one of his key advisors, talk that stemmed from her reported friendship with the US president.
Asked if that was true, Ms Nooyi said: "My personal friend? He is my president. We don't discuss these subjects. But let me tell you that for most CEOs in the US, the chapter II of our lives is serving the country. I am yet to begin my chapter II, but it will not be in the political arena. It will be giving back to the country in some shape or form."
But she does not support America's anti-outsourcing moves to fight unemployment, which is close to 10% in the US. "I am all for globalisation, and globalisation cannot be reversed," she said.
Part of an entourage of CEOs of top US corporations that is visiting India along with President Obama, the PepsiCo boss took time out to answer a number of questions put to her by ET. Edited excerpts:
When do you expect to narrow the gap in market shares between Coca-Cola and PepsiCo globally and in India?
Coca-Cola is ahead of PepsiCo in market share. The game we are playing is not to narrow market share with them (Coke). We are a diversified foods and snacks company; we are a completely different company. We are playing a selective game in beverages and increasing our leadership in foods. We have a natural edge and we are proud of it. If we look only at narrowing market shares with Coca-Cola, it will be foolish. The cola war is strictly a figment of imagination. Maybe it was there in the 1980s when the category was growing 8-10%. But it's completely irrelevant now.
Isn't India facing a burden of expectations as it is growing faster than some of your other markets like the US?
I won't call it a burden of expectations. I will call it a glorious opportunity. We want to be growing away from the home base. The business in India is buoyant, which has turned attention to this country in a nice way. It is a terrific time for India. They can now ask and get resources, people, money and technology much easier.
When do you expect PepsiCo sales to revive in the US?
It's not just about PepsiCo sales. It is about overall sales. But we are among the fastest-growing consumer packaged goods companies even in North America. If you look at core earnings, excluding impact of acquisitions, we are No. 1 in revenue growth. In the beverage business, the category is sluggish. So we make sure, we manage our pricing. We don't try to revive the category by artificial pricing. Overall, the PepsiCo business in North America is very strong because when the consumer is pinched, he doesn't give up on food and beverage. Maybe he will give up on a shirt.
You said last month that PepsiCo is making strategic investments to transform the company in specific ways. What are these investments?
We have a great balance between day parts in our portfolio, there's Diet Pepsi, Pepsi Max, baked Lays. Step one of portfolio transformation, which we started many years ago, is that we have been sneaking goodness into our products. Step two is about positive nutrition. By that I mean giving you products which are accessible, affordable, authentic, whatever defines good nutrition. We are doing a plus-up in our nutrition business.
For a company that says it is committed to portfolio transformation to healthy foods, your biggest spends (in India) still go to fizzy drinks and chips. Isn't that contradictory?
First, we are in a country where per-capita consumption of beverages is really very low. Second, the choices exist, but consumers have to adapt to them. It's just the way we eat here. I've been here two days and put on 10 pounds. I couldn't stop eating the Diwali ladoos and badam barfis. So diet habits here are a bigger societal issue, how do we get people to get more active? When I was growing up, there were places to walk. Today playgrounds are being converted into buildings. The playground in my school has been shut down and it breaks my heart. We are addressing these issues in our way. But as a society, we have to worry about the nutrition of people and the lifestyles they follow.
PepsiCo acquired bottlers for $7.8 billion in the US earlier this year. Are you planning similar buyouts in India?
No. In India, the market is still growing; we are not publicly listed here; and we have good bottlers here. We will see decades of growth in India; it will be years and years before we do a buyout of the bottlers in India.
What will the newly set-up 'value foods' division do? And when will 'Project Asha', which PepsiCo earlier said is looking at low-cost foods, take shape?
In India, we have over-nourished and under-nourished people. There's a big opportunity to tap both sections of consumers. On the one hand, we will look to plus up Quaker and Tropicana. On the other, Project Asha is looking at the bottom of the pyramid. It will look at balanced, low-cost nutrition, which should not taste bad. The project need not yield results in a year. We are looking at both beverages and snacks, priced at Rs 2 and below. We are also undertaking clinical trials for micronutrients in the products. Value foods will look at functional, nutritional foods.
You've been heading PepsiCo since 2006. Any disappointments?
I would not call it a disappointment, but because of the economic slowdown, we had to moderate our strategy. We could not invest as much as we wanted to
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