Six Degrees of Pepsi

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Marketing's generation next is increasingly coming from PepsiCo.

Elbowing aside companies perennially tapped for talent such as Procter & Gamble Co. and Kraft Foods, PepsiCo is bubbling its way to the top of headhunters' lists. The consumer-marketing world is brimming as never before with PepsiCo-trained hires that have successfully negotiated a $29 billion company with a fast-paced, act-first, get-permission-later culture that breeds executives who can fix problems and fill voids in a hurry.

McDonald's Corp., needing to replace high-profile outgoing Chief Marketing Officer Larry Light, recruited Mary Dillon, president of Pepsi's Quaker Foods, to replace him. ConAgra last month snagged Gary Rodkin, chairman-CEO of PepsiCo Beverages & Food North America, to be its president-CEO. And when Wal-Mart Stores was looking outside to bolster a marketing department that CEO Lee Scott admitted was subpar among retailers, it turned to Frito-Lay's Stephen Quinn, naming him the retailer's No. 2 marketing executive.

In an investors' conference, Mr. Scott recounted the reaction of PepsiCo Chairman-CEO Steve Reinemund, who said what most any executive would when his biggest customer poaches an executive: "If we had to lose him, we're glad it was to you."

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The list goes on. Struggling Sara Lee named former PepsiCo executive Brenda Barnes as its No. 2 executive last year, then elevated her to CEO to lead a massive restructuring this year. She signed former PepsiCo colleague C.J. Fraleigh, most recently of General Motors Corp., to run the new core retail business. Mr. Fraleigh in turn tapped Kim Feil, who started her career at PepsiCo's Frito-Lay and later worked at former PepsiCo property KFC as chief marketing officer.

That shift came only seven months after Ms. Feil had taken the top marketing post at Kimberly-Clark Corp.'s North Atlantic Personal Care unit. (She was the third PepsiCo veteran K-C hired in less than a year: first, K-C recruited Pepsi's top sales executive, Don Quigley, for the same role there, then named former Frito-Lay CEO Al Bru to its board this year.)

Recruiters have long recognized PepsiCo as a source of talent, said Mike Feiner, a 20-year veteran of PepsiCo human resources who's now a professor at Columbia University. "The tough thing was getting Pepsi people out."

Why now are headhunters having better luck? "As companies get much larger, it's hard to sustain that growth record," Mr. Feiner said. "You can't promote people as quickly, and there are not as many big jobs, so people are more willing to pick up the phone."

He believes PepsiCo has enough bench strength that brain-drain won't be a problem. The first sign of a problem would be if Pepsi needs to turn outside continually to fill senior positions, he said. That sign may have come earlier this year, when Frito-Lay named Irene Rosenfeld CEO less than a year after hiring the former Kraft Foods executive. "Is it a hot proving ground or is it a place everyone wants to get out of?" asked one marketing executive with close ties to PepsiCo. "Reinemund is tough to work with."

A PepsiCo spokesman attributed the demand for the company's talent to the training it provides on its stable of 16 billion-dollar-plus brands. For his part, Mr. Rodkin said in a press conference announcing his hiring that the recent exodus stems from a deep talent pool and attributed his own defection to a desire to be a CEO sooner than he could have become one at PepsiCo.

But Dave Gallagher, an Atlanta recruiter for Boyden World Corp. and veteran of both Coke and Pepsi, said PepsiCo rarely has been a place from which senior managers retire. The churn may even be welcome, he said, as moving up fast is part of the culture. Conversely, he said some Coke executives have grown concerned about relative lack of interest in their people.

PepsiCo also has a reputation for excellence across a broad range of marketing tactics, from promotions to in-store marketing to TV ads, said Cincinnati recruiter Dick Saterfield. "They're competing against Coke, the best brand name in America, but you always sense that Pepsi is winning."

Well, not always. Roger Berdusco, formerly VP-marketing of PepsiCo's Tropicana unit, left as exec VP of ConAgra's retail business last month to "pursue other interests."

Contributing: Stephanie Thompson

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