Will Pepsi's Buy Mean More Innovation & Better Drinks?
One of the biggest factors that hinder change at large beverage companies is the cost to alter the bottling process. Often the bottling companies have contracts that are tied up for years to deliver so many of a certain drink in a certain size. PepsiCo seem to have taken steps to change the status quo with the $6bn purchase of two of largest bottlers and therefore have greater control over its product sales in North America. The Financial Times reports:
If the acquisitions go ahead, PepsiCo will handle the distribution of about 80 per cent of its total North American beverage volume. “Our operating environment has evolved dramatically in the last decade,” said PepsiCo chairman Indra Nooyi. “By reshaping our business model we can significantly improve our competitiveness and our growth prospects”