PepsiCo’s Martin Glenn and Tom Kuzio explain how integration will deliver cross-category synergies. John Wood reports
Ask consumers what the link is between Walkers Snacks, Tropicana, Quaker Foods and PepsiCola and most would probably be stumped, but from this month the trade is going to see a much more coherent marketing strategy for PepsiCo UK’s four main brands.
Management of the separate businesses has been merged into a single unit headed by the former Walkers president Martin Glenn, who has become president of PepsiCo UK. Instead of facing four separate businesses, each trade channel will have its own cross-category unit.
The impetus for change began with a global review by the US parent company looking at ways to maintain its impressive growth record of recent years.
Glenn says: “We took a look over the summer and we decided we can hard-integrate these businesses, so for instance, Tom Kuzio, who was head of sales for Walkers, is now head of sales for PepsiCo and similarly Neil Campbell for marketing.”
Glenn is quick to emphasise that, other than a couple of senior departures, the reorganisation will not result in any redundancies. This is a bid to fuel sales growth rather than cut costs, he explains. “We believe the combined power of creating a bigger sales force for Quaker and Tropicana, and making sure we still have the same level of sales focus on the Walkers business, is going to lead to greater growth.”
Kuzio explains: “We will be running business units by account so, for instance, we will have Tesco, Asda and Somerfield/Kwik Save business units and within that, at buyer level, we will still have a separate chilled juice guy, a cereal guy, a Walkers guy. And Pepsi, through Britvic, will still be calling.”
He adds: “Independently, we all had insight groups and they were all good but each had its own way and its own perspective on how it approached its category and how to drive growth. What we feel now is if we put the insight groups under each of these business units, we should be able to provide better, quicker thinking into how we can drive business at a faster rate.”
Kuzio feels there are lessons to be learned from the way products are merchandised in his home country of the US, and believes integrating the businesses will enable PepsiCo to work more closely with retailers. He says: “In the US the retailers do a fantastic job of creating entertainment in their stores using beverages and snacks and a variety of products. One of the things we can do with this new organisation is brand different categories together and create big events.
“We’ve done it before to some degree, but it was a bit prohibitive when you were running separate profit and loss accounts and separate companies. Now we have a structure that allows cross-category integration for big events. One of the big ideas is to get theme-based offerings.”
Integrating the Pepsi business is not as straightforward as the other businesses because although PepsiCo owns the brand, in the UK Britvic is the bottler and distributor. However, PepsiCo and Britvic are looking at ways of strengthening their relationship.
“Britvic is a fantastic business. They have good sales power and they understand brands well,” says Glenn. “We would like Britvic to feel like they are a virtual part of our business and we of theirs.”
Glenn says that together they aim to drive substantial share growth. “We’ve let Coca-Cola have it too easy for the last few years,” he says. “We’re not losing volume but we are not gaining share either. There will be a lot more support for Pepsi in the new year in a very visible way. Consumers will see it a lot more. It will be a lot more assertive.”
Kuzio believes this is one of the areas where US-style joint merchandising will pay off. “There is natural synergy between beverages and crisps in the US. During sporting events Frito Lay and Pepsi take on this incredible presence in store and provide a lot of interest for consumers. If we build this relationship with Britvic and leverage this big event idea, we can really drive impulse sales.”
The trade has endorsed PepsiCo’s proposals to concentrate on growth, according to Glenn. Naturally, they would welcome lower prices if cost savings could be made, he says, but in high growth areas like Tropicana and Quaker healthy snacks, if PepsiCo could drive the rate of growth even higher, then retailers said that should be the overriding aim. For instance, he says, Tropicana penetration is 25% in London, but it is only 12% in the rest of the UK. “Our research shows there is a fantastic opportunity to get penetration up in the rest of the country. It’s crazy to cut back your sales force when you have that potential.”
Closer links between the healthy eating and the snacks teams will also pay dividends, he says. “People are open to healthy options and combining the Quaker name and their expertise with Walkers presents a big opportunity.”
Spotting the potential is the easy part, however, and Glenn is under no illusions that integrating the four businesses will be simple. “There’s a lot to undertake because there are four different ways to capture an order and four ways of delivering across four different businesses.”
Everyone in the organisation has been given their new responsibilities and this week the reorganisation went live.
Their aim will be to develop the particular strengths in parts of the business so they become collective strengths covering its full breadth.
“There will be a lot more support for Pepsi in the new year in a very visible way. Consumers will see it a lot more. It will be a lot more assertive.”
“This category is highly influenced by new products. We have a mindset at Walkers of new product development year in, year out.”
“It has 25% penetration in London but only 12% in the rest of the UK. There’s a fantastic opportunity there to get penetration up in the rest of the country.”
Pepsi
Walkers
Tropicana
Ask consumers what the link is between Walkers Snacks, Tropicana, Quaker Foods and PepsiCola and most would probably be stumped, but from this month the trade is going to see a much more coherent marketing strategy for PepsiCo UK’s four main brands.
Management of the separate businesses has been merged into a single unit headed by the former Walkers president Martin Glenn, who has become president of PepsiCo UK. Instead of facing four separate businesses, each trade channel will have its own cross-category unit.
The impetus for change began with a global review by the US parent company looking at ways to maintain its impressive growth record of recent years.
Glenn says: “We took a look over the summer and we decided we can hard-integrate these businesses, so for instance, Tom Kuzio, who was head of sales for Walkers, is now head of sales for PepsiCo and similarly Neil Campbell for marketing.”
Glenn is quick to emphasise that, other than a couple of senior departures, the reorganisation will not result in any redundancies. This is a bid to fuel sales growth rather than cut costs, he explains. “We believe the combined power of creating a bigger sales force for Quaker and Tropicana, and making sure we still have the same level of sales focus on the Walkers business, is going to lead to greater growth.”
Kuzio explains: “We will be running business units by account so, for instance, we will have Tesco, Asda and Somerfield/Kwik Save business units and within that, at buyer level, we will still have a separate chilled juice guy, a cereal guy, a Walkers guy. And Pepsi, through Britvic, will still be calling.”
He adds: “Independently, we all had insight groups and they were all good but each had its own way and its own perspective on how it approached its category and how to drive growth. What we feel now is if we put the insight groups under each of these business units, we should be able to provide better, quicker thinking into how we can drive business at a faster rate.”
Kuzio feels there are lessons to be learned from the way products are merchandised in his home country of the US, and believes integrating the businesses will enable PepsiCo to work more closely with retailers. He says: “In the US the retailers do a fantastic job of creating entertainment in their stores using beverages and snacks and a variety of products. One of the things we can do with this new organisation is brand different categories together and create big events.
“We’ve done it before to some degree, but it was a bit prohibitive when you were running separate profit and loss accounts and separate companies. Now we have a structure that allows cross-category integration for big events. One of the big ideas is to get theme-based offerings.”
Integrating the Pepsi business is not as straightforward as the other businesses because although PepsiCo owns the brand, in the UK Britvic is the bottler and distributor. However, PepsiCo and Britvic are looking at ways of strengthening their relationship.
“Britvic is a fantastic business. They have good sales power and they understand brands well,” says Glenn. “We would like Britvic to feel like they are a virtual part of our business and we of theirs.”
Glenn says that together they aim to drive substantial share growth. “We’ve let Coca-Cola have it too easy for the last few years,” he says. “We’re not losing volume but we are not gaining share either. There will be a lot more support for Pepsi in the new year in a very visible way. Consumers will see it a lot more. It will be a lot more assertive.”
Kuzio believes this is one of the areas where US-style joint merchandising will pay off. “There is natural synergy between beverages and crisps in the US. During sporting events Frito Lay and Pepsi take on this incredible presence in store and provide a lot of interest for consumers. If we build this relationship with Britvic and leverage this big event idea, we can really drive impulse sales.”
The trade has endorsed PepsiCo’s proposals to concentrate on growth, according to Glenn. Naturally, they would welcome lower prices if cost savings could be made, he says, but in high growth areas like Tropicana and Quaker healthy snacks, if PepsiCo could drive the rate of growth even higher, then retailers said that should be the overriding aim. For instance, he says, Tropicana penetration is 25% in London, but it is only 12% in the rest of the UK. “Our research shows there is a fantastic opportunity to get penetration up in the rest of the country. It’s crazy to cut back your sales force when you have that potential.”
Closer links between the healthy eating and the snacks teams will also pay dividends, he says. “People are open to healthy options and combining the Quaker name and their expertise with Walkers presents a big opportunity.”
Spotting the potential is the easy part, however, and Glenn is under no illusions that integrating the four businesses will be simple. “There’s a lot to undertake because there are four different ways to capture an order and four ways of delivering across four different businesses.”
Everyone in the organisation has been given their new responsibilities and this week the reorganisation went live.
Their aim will be to develop the particular strengths in parts of the business so they become collective strengths covering its full breadth.
“There will be a lot more support for Pepsi in the new year in a very visible way. Consumers will see it a lot more. It will be a lot more assertive.”
“This category is highly influenced by new products. We have a mindset at Walkers of new product development year in, year out.”
“It has 25% penetration in London but only 12% in the rest of the UK. There’s a fantastic opportunity there to get penetration up in the rest of the country.”
Pepsi
Walkers
Tropicana
No comments yet