PepsiCo has confirmed that Ramon Laguarta will replace departing CEO Indra K. Nooyi after she announced she will step down as head of the food and drink multinational on 3 October.
Laguarta, 54, was unanimously elected by the board of directors to succeed Nooyi after holding a number of executive positions during his 22 years at PepsiCo.
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He will inherit a steady ship from Nooyi. During her tenure as CEO, starting 2006, net revenue grew from $35bn to $63.5bn through to December 31 2017 – a compound growth rate of 5.5%
Shareholders enjoyed a return of 162% over the same period, with total cash returned to shareholders through dividends and share repurchases of $79.4bn.
Company shares rose by more than 1% as trading opened following the news, with investors encouraged by the veteran appointment and the news that Nooyi will stay on as chairwoman for a year.
In a statement, Nooyi – who spent 24 years with the food and drink multinational and was CEO for the last 12 – said that PepsiCo was in a “strong position” with its “brightest days still ahead”.
Brazilian native Laguarta will become the sixth CEO since PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito Lay.
All of the CEO appointments during its 53-year history have been from within the organisation.
The rest of PepsiCo’s senior leadership team will remain unchanged.
What did Ramon Laguarta do before becoming CEO?
Before joining the $168bn company, Laguarta held a number of international roles at leading Spanish confectioner Chupa Chups, known for its lollipops.
His education reflects his Spanish and US CV; Laguarta holds an MBA from ESADE Business School in Spain and a Master’s in International Management from Thunderbird School of Global Management in the US.
Since joining PepsiCo 22 years ago, he has overseen global operations, corporate strategy, public policy and government affairs.
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He has previous experience at the top, serving as chief executive for PepsiCo’s Europe Sub-Saharan Africa division.
There he was able to use his multilingual skills as a polyglot who can speak English, Spanish, German, French and Greek.
In a statement, Laguarta said that he was “incredibly humbled” to be appointed and paid tribute to Neeyi.
Daniel Vasella, chairman of PepsiCo’s nominating and corporate governance committee, said:
“Ramon is a strong and proven executive with an outstanding track record growing organically and by acquisition some of PepsiCo’s largest and most important international businesses.
“He keenly understands the evolving needs of consumers and customers and the trends affecting our business in markets around the world.”
Challenges ahead for Laguarta and PepsiCo
One trend that Laguarta will have to tackle is the increasing negativity around sugary soft drinks that has led to a number of countries implementing or considering a sugar tax.
In April 2018 the UK introduced a two-tier sugar tax that sees drinks with more than 5g of sugar per 100ml charged 18p per litre, while those with 8g or more face levies of 24p per litre.
More than 50% of sugary soft drinks have changed their formulas in the wake of the tax, according to Treasury figures.
France, Mexico and Saudi Arabia are all among countries that also have a sugar tax. The US, where 154 litres of carbonated drinks are consumed per capita, has taxes in force in some states but has met fierce resistance elsewhere.
In January, Pepsi launched a campaign that looked back at retro products to counter this.
Neeyi has been steering the company towards healthier options, such as Naked juices made of fruits and vegetables.
Laguarta, who reportedly eats the company’s Quaker Oats with blueberries for breakfast every day, said in an interview that PepsiCo needs to think carefully about moving into a “new space where we’re probably not as competent as our core categories.”
He has also said that he will continue to follow Neeyi’s health-focused direction and aims to see through the company’s goal for its nutritious products to outpace the rest of its portfolio by 2025.