Back in August, PepsiCo bought Pepsi Bottling Group and PepsiAmericas for $7.8bn in a deal designed to speed up decision making and get products to market quicker.
Merging the two bottlers is the next step in the process of integrating the businesses into PepsiCo. Together they will become PBNA – a new business that will comprise of all the current operations of the two previously independent bottlers in the US, Canada, Mexico.
Newly merged business
The resulting business will account for about three-quarters of the volume of the PepsiCo North American bottling system, with independent franchises making up the rest.
PBNA will be separate from the PepsiCo Americas Beverages (PAB) unit, which will continue to oversee independent bottlers and Gatorade and Tropicana operations. PepsiCo said the separation will allow greater focus for both businesses and enable PBNA to continue producing and distributing “allied brands” that are not owned by PepsiCo.
Current Pepsi Bottling Group and PepsiAmericas operations in Europe and Russia will be managed by PepsiCo Europe.
New CEO appointed
Eric Foss, current chairman and CEO of Pepsi Bottling Group, will lead the new American bottling business and take up the challenge of creating “a lean, nimble and highly-efficient organisation.”
Reacting to the appointment, Consumer Edge Research analyst Bill Pecoriello said: “Given the heavy lifting that will be required to integrate the three separate companies, realise cost and revenue synergies, along with eventual route-to-market changes, a strong leader is required. We can think of no executive better positioned for this role than Eric Foss.”
With the new structure, PepsiCo claims the company will be able to continue refreshing its core soft drink brands and, at the same time, begin delivering on the promises set out in August. These include the development of an organisation that is more streamlined and better able to react quickly to market changes.
Coca-Cola continues to sell drink concentrate to independent bottlers who bottle and distribute its drinks so eyes will now be on PepsiCo to see if its new integrated system performs as hoped.