Soft drinks giant PepsiCo is to merge all its North American drinks operations into one division in a bid to strengthen its position in its long-running battle with arch rival Coca-Cola.
The new unit, PepsiCo Beverages and Foods North America, will add Pepsi-Cola North America to the existing Gatorade, Tropicana and Quaker drinks businesses in the US and Canada. The division will be headed by Gary M. Rodkin, president & CEO of Pepsi-Cola North America since 1999.
"The strategy we started more than 10 years ago continued with last year's merger with Quaker and Gatorade has PepsiCo well positioned in our drive towards leadership as the total liquid refreshment beverage company," said Steven S Reinemund, PepsiCo chairman and CEO.
"Consumer's tastes and needs for refreshment, functionality, fun and convenience in beverages are evolving rapidly. Today's step reflects our belief that we have the talent and expertise, the brands and the resources, and now the structure to ensure we are ideally equipped to keep meeting the needs of all consumers well into the future."
PepsiCo has long been active in the cola market, but in recent years has been expanding its beverages business into a number of new areas, including so-called New Age drinks brands such as SoBe, sports drinks such as Gatorade, fruit juices such as Tropicana and Dole and water such as Aquafina.It also has a substantial snacks business, led by brands such as Lays and Doritos.
The soft drinks market in the US has undergone a number of changes in recent years, with few of the smaller players who once dominated the non-cola segment still remaining. Companies such as Tropicana, SoBe, Nantucket Nectars, Gatorade and so on have been steadily acquired by the three leading players - Coca-Cola, PepsiCo and Cadbury Schweppes - who have tightened their grip on the market as a whole.
While acquisition has been the principal means of expansion for these companies, they have not been slow to create their own new products either - sometimes via extensions of existing lines such as Vanilla Coke, Pepsi Blue or Dr Pepper Red Fusion, or via completely new products such as the Choglit chocolate milk drink planned by Coke.