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Pepsico to Restructure, Split in Three Units

PepsiCo announced a restructuring Monday that will split the food and beverage company into three units -- one for food in the United States, one for U.S. drinks and one for food and drinks abroad.

Pepsi
Seth Perlman
Pepsi

The world's No. 2 soft drink company behind Coca-Cola currently has two operating segments, one for North America and one for international.

The company also said Dawn Hudson, chief executive and president of Pepsi-Cola North America, is resigning to pursue other opportunities. She will be replaced by Hugh Johnston, who is currently the company's executive vice president of operations.

PepsiCo Americas Foods, which will include Frito-Lay North America, Quaker and the company's Latin American food and snack businesses, will be run by John Compton, the current chief executive of PepsiCo North America.

PepsiCo Americas Beverages, which will include all North American beverage sales including Gatorade and Tropicana, will be run by Massimo d'Amore, a current executive vice president of PepsiCo International.

PepsiCo International will include all business in Britain, Europe, Asia, the Middle East and Africa, and will continue to be run by Mike White.

"Given PepsiCo's robust growth in recent years, we are approaching a size which we can better manage as three units instead of two," said Chief Executive Indra Nooyi.

The Purchase, New York-based company, which had 2006 revenue of more than $35 billion, has evolved from a maker of soft drinks into a food and beverage giant whose portfolio of brands includes Frito-Lay snacks, Quaker oatmeal, Aunt Jemima syrups and Rice-A-Roni side dishes.

So far this year, PepsiCo Americas Foods has accounted for 45 percent of the company's revenue, while PepsiCo Americas Beverages made up about 30 percent and PepsiCo International made up about 25 percent, the company said.

The diversification has helped the company as health-conscious consumers in developed markets like the United States seek alternatives to traditional carbonated soft drinks.