PepsiCo Looks to Dairy for Growth

January 16, 2012 02:11 AM

PepsiCo, the maker of Pepsi and a whole bevy of instantly recognizable brands such as Frito-Lay, Tropicana and Quaker Oats, is looking to dairy products and ingredients to more than double its revenues in the next decade.

And that’s saying something, since 15 of its brands have annual revenues exceeding $1 billion annually. "Every week, one billion people buy PepsiCo products around the world," said Sam Lteif, general manager of PepsiCo’s global nutrition group. He spoke at the opening session of Dairy Forum 2012 here in La Quinta, Calif., last night.
Over the next decade, Lteif said, the potential to grow dairy globally is more than double that of the next two food categories—bakery and chilled processed foods—combined. The reason: Dairy fits the nutritional needs of everyone—from children and teenagers (for growth and development) all the way through the elderly (for bone health and other key nutrients). "Dairy has tremendous potential, is incredibly dynamic and will be a key component to our global growth strategy," Lteif said.
Lteif assured those present at the Dairy Forum, mainly processors with a smattering of dairy producers, that PepsiCo will not enter the commodity businesses of fluid milk and butter. Rather, the company looks to dairy ingredients and new product development to fill specific nutritional niches.
"PepsiCo’s plan for new products will be staple foods that meet a consumer need every day, and not a treat that they consume once in a while," he said. Those products will differ by country and region.
The key "unlock," he said, is nutritious, healthy foods that taste good. "Think of it as convenient nutrition," Lteif said.
In Africa, it might be a drinkable milk or yogurt. In India, a protein snack that is so affordable it can be purchased by the masses. And in more developed countries, high-end, value-added products that offer nutrition, taste and convenience. In the U.S., for example, our consumption of yogurt is just one-fourth to one-third that of the Europeans'.
In Russia, PepsiCo has recently purchased Winn Bill Dann, which gives the company immediate access to Russian grocery outlets. Winn Bill Dann already offers unique and innovative products in drinkable milk, kids’ yogurt and puddings. These products have the potential to be expanded globally.

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Spell Check

1/23/2012 04:42 AM

  Consumers need dairy products without added preservatives. There is the technology available to produce organic dairy products and products without added preservatives. This technology also extends products shelf life and reduces production costs. Our observation of North American dairy plants shows that most manufacturing facilities are incapable to produce safely products with required quality. The same processing issues have been replicated through decades in whole industry and became a standard in North America. Most of existing production lines are designed with very old approach. These lines are very vulnerable - dairy products can be easily contaminated by the airborne bacteria, cleaning chemicals, left-over materials and other sources. Now it's right time to revise the designing approaches and apply new technologies that protect consumer's health and save manufacturers' money.


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