Transcript - PepsiCo

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FEBRUARY 23, 2012 / 3:30PM, PEP - PepsiCo at Consumer Analyst Group of New York ConferenceNumber one, hold or grow value share. Number two, pathway to profitable growth, and number three, with [add] return on invested capital. Andwe said we needed to see the pathway to that in 12 to 18, months, so that timeframe has not changed. We need to see that pathway in 12 to 18months.Unidentified Audience MemberSo, will there be constant updates, or are we going to wait 12 to 18 months for the decision?Hugh Johnston - PepsiCo - CFOWell, I think in terms of terms of the constant update piece, you will see the value share. You will see the profitability, because it's disclosed andyou will see the ROICs, because we give you the asset base. So, we talk about it as we disclose the quarter, but we will see the information just thesame as we will.Unidentified Audience MemberAnd just on the beverage side of pricing?Tom Greco - PepsiCoIt's consistent with what I've said about the snack business.We've largely taken it to date.Unidentified Audience MemberGreat.Thank you.Tom Greco - PepsiCoJohn?Unidentified Audience MemberThanks. Just a quick follow-up, actually, on Bill's, about the pricing. So, the one difference, though, right, is you're pricing to cover all cost inflationon Frito but you are not pricing to cover all the cost inflation on beverages? Is that what you are saying?Tom Greco - PepsiCoFair statement.Unidentified Audience MemberOK. And it's rollover pricing from fourth quarter of last year?THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us11©2012 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited withoutthe prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliatedcompanies.
FEBRUARY 23, 2012 / 3:30PM, PEP - PepsiCo at Consumer Analyst Group of New York ConferenceTom Greco - PepsiCoThat's correct.John Compton - PepsiCo - CEOThat's correct.Unidentified Audience MemberOK. You know, following up again -- I hate to sort of pick on this continued sort of decision process, but when you talk about your value sharetargets in beverages it's on a total LRB basis, right? So as I look at your DSD organization if you are growing share in Trop and Gatorade which issort of out of the bottler network, but let's say you're continuing to lose share in CSDs, you know, I am just trying to figure out how your decisionon that route to market will work within the construct of how you are looking at LRB shares within segments?Indra Nooyi - PepsiCo - Chairman and CEOJohn, we've played the LRB game, have been playing it for-- Gatorade still goes to DSD in small formats. Tropicana is a tiny piece of the wholepuzzle. We are going to look at total LKRB share. That's the game we play. The CSDs have become smaller for the marketplace. The rest of thenon-carbs have been growing faster, so we will continue to look at value share in total.Total LRB.Unidentified Audience MemberI guess if the conscious decision is to sort of cede value share within your DSD businesses, isn't that sort of a fait accompli?Indra Nooyi - PepsiCo - Chairman and CEO80% of the business is going through DSD, so we don't put value share overall. DSD value share has to grow.Think about it.Tropicana and large-formatGatorade is the only one that goes through warehouse. Everything else goes through DSD.Tom Greco - PepsiCoRight here. Right behind you.Unidentified Audience MemberHi, Tom or John -- [any] margin structure is the envy of the food industry and you have been able to expand it the last couple of years despite thecommodity pressure. So can you talk about your ability, longer term, to continue to expand margins in North America and if there is a certain pointyou think-- that level?John Compton - PepsiCo - CEOI'll take that, and maybe Tom can add on.You know, remember being at CAGNY many times, we had a period of time where we were not growing margin at Frito-Lay. Margins were roughlyflat. And we don't need to expand margins 100 basis points a year in that business. If we get mid single-digit revenue our expectation is turn thatTHOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us12©2012 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited withoutthe prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliatedcompanies.
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