“The success of consumer goods lies in finding a complex balance between growing the fundamental business and taking advantage of opportunities generated by megatrends,” declared Xavier Orriols, Senior Vice President for Europe and President for Southwest Europe at PepsiCo, at the most recent session of Matins ESADE, sponsored by Bluecap and organised in collaboration with La Vanguardia. With more than 22 brands that generate an annual turnover of more than a billion US dollars each, PepsiCo brought in more than $63 billion in 2017, $11 billion of which came from Europe. The company’s brands are present in more than 200 markets and territories across the globe.

During his talk, Mr. Orriols reviewed the major trends in the consumer goods industry, which are disrupting the traditional model of success. He began by mentioning demographic changes, particularly the emergence of two very different consumer groups that “have very different ways of interacting with brands”: millennials and older people.

Mr. Orriols also highlighted the hyperconnected lifestyle of today’s consumers, the growing awareness about matters of health and well-being, the success of small brands and the growth of discounters. “We have to adapt to these trends,” he argued, “because we cannot change them.” Another factor poised to transform the consumer goods sector is e-commerce, although Mr. Orriols acknowledged that “this process will be slower in our sector”.

He then turned his attention to another important factor: the size of people’s homes, which influences the extent to which they consume products elsewhere. He also touched on the topics of geopolitical, regulatory and financial instability, the scarcity and uncertainty of resources worldwide, and the emergence of activist groups.

Mr. Orriols also mentioned various new capacities that are essential for the consumer goods sector: big data applied to understanding consumers better, excellence in digital marketing, the management capacity of big brands as well as smaller companies, and the comprehensive management of distribution channels.

Results with responsibility

“Being a socially responsible company is not a choice,” declared Mr. Orriols. “It has to be an intrinsic part of your growth strategy.”

PepsiCo’s vision of results with responsibility involves “the fundamental belief that our company’s success is inextricably linked to the sustainability of the world around us”, he explained. “We believe that continuously improving our products, operating responsibly to protect the planet and empowering people is what allows PepsiCo to remain a successful global company that creates long-term value for society as well as for our shareholders.”

Since 2006, when PepsiCo introduced its “Results with Responsibility” vision, the company has achieved numerous milestones. “We have reduced the added sugars, sodium and saturated fats in many of our products and expanded our offering of more nutritious foods and beverages,” he explained. “We have increased the efficiency of how we use water and energy in our operations, and we have promoted sustainable agricultural practices all over the world.” Finally, he noted that PepsiCo has built a diverse, participatory culture and made a concerted effort to strengthen the communities where it operates.