PepsiCo focuses on fast-tracking innovation and discovering trends with AI
pepsico Michael Del Pozo, President of Pepsi’s U.S. Beverage Business, spoke with Matthew Shea, President and CEO of NRF, about the current state of Pepsi’s business.
It’s all driven by the consumer, he said. “As long as we continue to keep this at the forefront of everything we do, we feel like we’re anticipating change rather than reacting to it.”
The company focuses on three priorities. The first is to adapt our portfolio to changing consumer needs shaped by health and wellness trends, such as the popularity of GLP-1 medicines. This has led to innovations like prebiotic sodas and low-sugar, artificial-free options from Gatorade, Lay’s, and Tostitos.
The second is the acceleration of innovation enabled by technologies such as AI.
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“Innovation used to take one to two years, but that’s no longer possible. Trends have changed,” del Pozo said. “We’ve actually been working hard to fast-track innovation with our AI capabilities in R&D, test it with retailers in specific markets, and launch it from digital shelves. Prebiotics launched digital-only on Black Friday.”
The third is partnerships through M&A. Del Pozo cited the success of Celsius, Arani and Poppi as examples. By selling the Rockstar business to Celsius and subsequently acquiring Arani, the company was able to achieve an energy portfolio with a 20% market share.
“Poppy was a great addition to an incredible portfolio that we believe has already achieved 22% household penetration,” he added. “It’s going to be a multibillion-dollar brand for us. That’s where the future of soda is headed.”
This is not a one-size-fits-all approach, he stressed, noting that data sharing is becoming a big part of developing the relationship.
“We might argue about what the best ROI is for some of the data, but we want to get as much data as possible. We want to make data-driven decisions and collaborate on how we need to market in this new world.”
In past years, he said, there has been more discussion around pricing and merchandising decisions. The company is now taking a more holistic approach to its business and considering end-to-end impact.
