While much of PepsiCo, Inc.’s presentation at the recent Consumer Analyst Group of New York conference centered on strength in beverages and Frito-Lay, company executives also discussed the challenges facing the company’s Quaker Foods North America business.
Brian Cornell, chief executive officer of PepsiCo Americas Foods, said Quaker has been like many companies that have been caught in some of the headwinds prevailing in traditional center-of-store categories.
“It has really been a tale of kind of multiple stories,” he said. “Our innovation at Quaker continues to really perform well with today’s consumer. I feel great about innovation like Real Medleys, areas where we brought yogurt to bars and some of the things that we have done across our portfolio.
“But while the hot category continues to perform well, ready-to-eat cereal has been a challenged category over the last several years. We have a significant ready-to-eat cereal business, (and) the snack bar business has seen some additional headwinds.”
As a result of the challenges, PepsiCo is “stepping back” with Quaker, Mr. Cornell said. He indicated the company is sharpening its focus on how to build the Quaker trademark, as well as how to bring the right innovation to unlock pockets of growth in the brand’s portfolio.
“So it’s a work in progress right now, but what is working is innovation, which tells me as we look forward we’ve got a better understanding of what the consumer is looking for,” he said. “We have got a very trusted brand and we better make sure that we find ways to unlock and make the brand even more relevant going forward.”
Operating profit for the Quaker Foods North America segment in fiscal 2013 ended Dec. 28, 2013, was $617 million, down 11% from $695 million during fiscal 2012. Revenue for the segment was $2,612 million, down 1% from $2,636 million.
