Pepsi-Cola Chief Dawn Hudson Is out Following Reorg

Food-and-Beverage Giant Puts Emphasis on International as North America Weakens

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CHICAGO ( -- Pepsi-Cola North America President-CEO Dawn Hudson is leaving the company as part of a sweeping reorganization that acknowledges the company's comparatively swifter-growing international businesses.
Dawn Hudson
Dawn Hudson

The $35 billion consumer-products behemoth is breaking into three divisions (from two currently): PepsiCo America Foods, comprised of Frito-Lay, Quaker, and Latin American food products; PepsiCo Americas Beverages, including Pepsi-Cola North America, Gatorade, Tropicana and Latin American beverages; and PepsiCo International, which includes all PepsiCo businesses outside North America.

Smaller profits domestically
The company previously was split into two divisions, one domestic and the other international. In third-quarter earnings announced last month the company said "broad-based volume gains in snacks and beverages coupled with foreign currency tailwinds resulted in continued double-digit revenue and operating profit growth" at PepsiCo International. Meanwhile, profit growth in North America, a region dogged by health concerns and rising obesity rates, lagged at 7%. Domestic beverages, including the softening Gatorade brand, also posted a comparatively smaller 7% profit growth.

Bloomberg News last week, in an interview with Pepsi CEO Indra Nooyi, pointed out that the company's international revenue, which made up 37% of the company's total last year, is growing four times faster than that of U.S. and Canada.

Bonnie Herzog, an analyst with Citigroup, praised the restructuring. "We believe the movement of the Latin American business under the Americas umbrella allows management to share best practices from its international businesses across the North America organization," she wrote in a research note.

Not surprised at departure
Ms. Herzog was not surprised at Ms. Hudson's departure, noting that PepsiCo North America has underperformed. "The move bringing new leadership is likely the casualty of a tough year in the segment."

The company press release indicated that Ms. Hudson, a former D'Arcy Masius Benton & Bowles and DDB Worldwide executive who has held several senior marketing titles during her tenure at Pepsi, was leaving "to pursue interests outside the company." Hugh Johnston, currently exec VP-operations for PepsiCo, was named her successor.

"Let me also take this opportunity to thank Dawn Hudson for her extraordinary contributions to PepsiCo over the last 11 years," Ms. Nooyi said in a statement. "She is a remarkably talented and passionate leader, and I wish her the very best in her future endeavors."

PepsiCo's longtime agency partner is Omnicom Group, Ms. Hudson's former employer. Dozens of Omnicom-owned agencies, including its three ad agency networks, work on behalf of Pepsi brands. It's unclear how Ms. Hudson's departure will affect that exclusive contract.

Other key leaders
As for the other divisions, John Compton, now CEO of PesiCo Nortah America, becomes CEO of PepsiCo Americas Foods. Massimo d'Amore, currently exec VP-commercial of PepsiCo International, becomes CEO of PepsiCo Americas Beverages. Mike White, PepsiCo vice chairman and CEO of PepsiCo International, continues to lead that unit.

The company said Mr. White will work closely with Ms. Nooyi on "leadership development initiatives" across PepsiCo.
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