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At PepsiCo, Making Its Products Healthier Doesn't Mean Forsaking Customers

At the Fast Company Innovation Festival, CEO Indra Nooyi talked about how PepsiCo is diversifying its food and beverage portfolio.

At PepsiCo, Making Its Products Healthier Doesn't Mean Forsaking Customers

[Photos: Celine Grouard for Fast Company]

The company behind products like Doritos, Lay's, and Mountain Dew isn't exactly synonymous with healthy eating. Yet PepsiCo is going out of its way to change that—most recently, by outlining three pillars of sustainability, the first of which is to make its food and beverage choices more nutritious.

"This is being true to the changes in society," said PepsiCo CEO Indra Nooyi during an appearance at the Fast Company Innovation Festival. "What we're saying now is, how can we maintain the great taste of Pepsi and Dew and Lay's and Doritos and Cheetos, but make them more permissible? I can't put grains into them or put vitamins into Pepsi and make it healthy. That's disingenuous. What we can do is reduce the salt, the fat, the sugar."

PepsiCo's portfolio is now divided into three categories, Nooyi said—"fun for you," which covers the Pepsi and Doritos tier of products; "better for you," which encompasses products like Diet Pepsi and Baked Lay's; and "good for you," which includes the likes of Sabra hummus and Naked juices.

According to chief scientific officer Mehmood Khan, who joined Nooyi on stage, the question is not whether sugar is good or bad for you—it's about the quantity, which means giving customers a range of options. And PepsiCo has set the goal of having no more than 100 calories of added sugar in two-thirds of its global beverage portfolio by 2025. As with PepsiCo's other objectives for 2025—which include decreasing salt and saturated fat content—this goal was based on dietary guidelines from health proponents including the World Health Organization and American Heart Association.

"We're anchored in science," Khan said. "And we're not only offering choices, but we're committing to a volume distribution—which means it's not just product development. End-to-end across the company, we're committing to change the volume of products sold that are ultimately consumed by consumers."

That last piece—tweaking the product lineup made available to consumers—means conveying the importance of eating healthier to PepsiCo's customer base.

"Usually, you have to make a choice between health and taste, or you have to pay more for healthy products," Nooyi said. "So we have to make sure that they're ubiquitous and available, reasonably priced, and great tasting. Then we have to display those on shelves so we nudge you to the healthier choices." Both Nooyi and Khan were emphatic about the fact that PepsiCo's role isn't that of a nanny who polices what consumers eat—especially because there's little global consensus about what is or isn't healthy.

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