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PepsiCo Gets Healthier: CEO

PepsiCo, facing a New York City attempt to regulate soft drinks to help combat obesity, hopes to make its sodas healthier.

AP

“Take your core ‘fun for you’ products and make them more permissible,” Indra Nooyi, PepsiCo’s CEO, told CNBC’s “Squawk Box” on Wednesday.

“Reduce the salt level, but don't give up on taste. Reduce the fat levels. Reduce the sugar levels. Take the zero calorie products and nudge consumers to buy more of that,” Nooyi said. “Take the good-for-you products and make them great tasting so people never have to compromise taste for health or health for taste. That’s the strategy PepsiCo is following.”

Nooyi added it shouldn’t be an either-or proposition. Give consumers the choice, she said, “fun for you, better for you, good for you.”

New York City Mayor Michael Bloomberg has called for a ban on soda and sugary drinks over 16 ounces. But Nooyi said banning products in an attempt to change consumer behavior isn’t the answer to obesity.

“We've got to find a way to align the subsidies and align the incentives so we can affect fundamental change in consumers eating habits,” she said. That means making it affordable and easier for consumers to buy corn, fruits and other vegetables. (Read More:World Food Prices Jump 10% as Drought Sears Crops.)

While some Wall Street analysts have pushed back against this strategy, Nooyi said a CEO has to consider the overall investor base and manage the company with a long-term view. “We don’t manage PepsiCo for one quarter,” Nooyi said.

This approach should also be applied to rebuilding the broader economy. “We have to take a multiple-decades view of the country and of companies because we have to help build the country,” the PepsiCo CEO said. “If you think in terms of multiple years and decades, you will really build the underlying base of the economy.”

Nooyi acknowledged that with the 24-hour news cycle and fickle investors, thinking long-term can be a challenge.

“I think it is going to be very hard for companies to really think long term unless the CEO and board of directors have extraordinary courage,” she said.

-By Justin Menza, CNBC News Writer

Questions? Comments? Email us at consumernation@cnbc.com.

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