Dive Brief:
- Innovation will be key in solving challenges that food companies will face in the future, such as feeding a fast-growing world population, said PepsiCo's vice chairman and chief scientific officer of global research and development Mehmood Khan in his keynote address at AACC International’s centenary meeting.
- PepsiCo CEO Indra Nooyi recruited Khan a decade ago, and his task was to expand R&D at the company, which has become key to PepsiCo's growth strategy over the years.
- "By 2013, net revenues from innovation accounted for 8% in sales," Dr. Khan said in his keynote address. "In 2014, it was 9%. Any declines we had in traditional brands were more than offset by these innovations." Also in 2014, 10 PepsiCo products made it into that year's list of the Top 50 new products.
Dive Insight:
"The only way you can change is invest back in innovation. You cannot grow yourself out (of the challenges the food industry faces) by efficiency alone. Yes, this grows the bottom line, but cannot grow the top line without innovation," Dr. Khan said.
Part of PepsiCo's innovation strategy is to change the composition of some of its products, which has included removing more than a half-billion pounds of sugar from U.S. food products and reducing salt in products like Lay's potato chips, a bag of which "now contains less sodium than one slice of bread," Khan said. PepsiCo also replaced aspartame with sucralose in Diet Pepsi, but that change hasn't been well-received.
Innovation at PepsiCo comes in the form of products but also in the way they interact with consumers at the point of sale. The company recently named a new leader of its e-commerce efforts, Gibu Thomas, Wal-Mart's former head of mobile and digital, to expand that segment of its business.
Food Dive declared PepsiCo the winner of Coca-Cola in the first installment of new series "Food fight," which evaluates competing food and beverage companies based on earnings, marketing, transparency, and other relevant factors.