NEW YORK, May 25 (Reuters) - Small independent bottlers of PepsiCo Inc drinks have their strongest voice since the world's second-largest soft drink maker spun off Pepsi Bottling Group in 1999, a senior executive said on Tuesday.
'In the past, the franchise organization had to deal with the complexity of having two very large, public company anchor bottlers as well as about 100 independent smaller franchisees,' said Massimo D'Amore, chief executive officer of PepsiCo's Americas Beverages business.
PepsiCo acquired its largest bottlers, Pepsi Bottling Group Inc and PepsiAmericas Inc, at the end of February to gain more control over its North American distribution.
'Now I have a franchise organization that is 100 percent devoted to independent bottlers,' D'Amore said. 'You don't have the hundred-pound gorillas in the room.'
The acquisition came after more than a decade of Pepsi having its biggest bottler operate independently.
The integration and the anticipated cost-savings are 'on track,' D'Amore said on Tuesday at a conference hosted by Beverage Marketing Corp and Beverage World.
In response to a question, D'Amore said PepsiCo's procurement alliance with brewer Anheuser-Busch InBev to jointly purchase goods and services like information technology and office supplies was not a precursor to any kind of equity-sharing or merger.
However, he said the procurement team might consider jointly buying ingredients or packaging materials.
AGGRESSIVE PRICING
As the beverage industry gears up for the critical summer selling season, D'Amore acknowledged that price promotions were heating up.
'It's probably the most dynamic environment in retail that we've seen over some time,' D'Amore said, referring to the impact of 'aggressive' price promotions initiated by Wal-Mart Stores Inc in time for next week's Memorial Day holiday.
'They're doing this on their nickel,' he said, adding that PepsiCo, maker of Sierra Mist and Diet Pepsi, got Wal-Mart to pay it the prices that it wanted.
Michael Bellas, CEO of Beverage Marketing Corp, said Wal-Mart was offering a case of 24 cans of soda for $3.99, a price not seen for a decade.
Rival Dr Pepper Snapple Group Inc also cited heavy holiday promotions in an interview on Monday with Reuters.
Shares of PepsiCo were down 1.9 percent at $62.14 in afternoon trading.
(Reporting by Martinne Geller; Editing by Lisa Von Ahn)
((Reuters Messaging: martinne.geller.reuters.com@reuters.net; (646) 223-6023)) Keywords: PEPSICO/ (http://blogs.reuters.com/shop-talk/ for Shop Talk -- Reuters' retail and consumer blog) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'In the past, the franchise organization had to deal with the complexity of having two very large, public company anchor bottlers as well as about 100 independent smaller franchisees,' said Massimo D'Amore, chief executive officer of PepsiCo's Americas Beverages business.
PepsiCo acquired its largest bottlers, Pepsi Bottling Group Inc and PepsiAmericas Inc, at the end of February to gain more control over its North American distribution.
'Now I have a franchise organization that is 100 percent devoted to independent bottlers,' D'Amore said. 'You don't have the hundred-pound gorillas in the room.'
The acquisition came after more than a decade of Pepsi having its biggest bottler operate independently.
The integration and the anticipated cost-savings are 'on track,' D'Amore said on Tuesday at a conference hosted by Beverage Marketing Corp and Beverage World.
In response to a question, D'Amore said PepsiCo's procurement alliance with brewer Anheuser-Busch InBev to jointly purchase goods and services like information technology and office supplies was not a precursor to any kind of equity-sharing or merger.
However, he said the procurement team might consider jointly buying ingredients or packaging materials.
AGGRESSIVE PRICING
As the beverage industry gears up for the critical summer selling season, D'Amore acknowledged that price promotions were heating up.
'It's probably the most dynamic environment in retail that we've seen over some time,' D'Amore said, referring to the impact of 'aggressive' price promotions initiated by Wal-Mart Stores Inc in time for next week's Memorial Day holiday.
'They're doing this on their nickel,' he said, adding that PepsiCo, maker of Sierra Mist and Diet Pepsi, got Wal-Mart to pay it the prices that it wanted.
Michael Bellas, CEO of Beverage Marketing Corp, said Wal-Mart was offering a case of 24 cans of soda for $3.99, a price not seen for a decade.
Rival Dr Pepper Snapple Group Inc also cited heavy holiday promotions in an interview on Monday with Reuters.
Shares of PepsiCo were down 1.9 percent at $62.14 in afternoon trading.
(Reporting by Martinne Geller; Editing by Lisa Von Ahn)
((Reuters Messaging: martinne.geller.reuters.com@reuters.net; (646) 223-6023)) Keywords: PEPSICO/ (http://blogs.reuters.com/shop-talk/ for Shop Talk -- Reuters' retail and consumer blog) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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