Purchase, N.Y.-based PepsiCo Inc. has never been afraid to shake up the proverbial pop can and spray it in the face of a competitor.
PepsiCo may have to shake up more than pop cans to fend off rivals who are said to be interested in hiring away key executives of its Quaker Oats division.
And there’s nothing funny about that when traditional soft drink sales are as soft as a down pillow, and Quaker’s Gatorade brand is as strong as ever and its slow-growth cereals still offer significant profit margins.
In other words, PepsiCo desperately needs stability at its offices in Chicago.
Until now, PepsiCo had little to worry about.
That’s because a number of top Quaker executives would have walked away from a substantial amount of money had they left the firm within three years of PepsiCo’s $13.8 billion deal to acquire Quaker.
But with stock options becoming fully vested in the wake of the deal in 2001, all bets are off.
Executives could leave with bulging wallets and big opportunities.
Sources close to PepsiCo said that recruiters and companies alike have focused their sights on at least two Quaker veterans, Gatorade chief Charles Maniscalco and cereals president Polly Kowalek–both ensconced in their top positions since 2002.
PepsiCo executives couldn’t be reached for comment Friday.
There are no indications that either is ready to leave the organization, but the two have become “wish-list executives” on national recruiters’ lists.
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“Everybody’s waiting to see if they’ll listen to other opportunities,” said one national executive recruiter.
The interest in Quaker’s top personnel is not surprising.
The Quaker acquisition has been a boon to Pepsi, particularly when it comes to Quaker’s Gatorade, which continues to grow more than 10 percent annually, despite locking up more than 80 percent of the sports drink market.
Last year, Pepsi’s beverage revenue grew 7 percent to $7.7 billion. But carbonated soft drinks, which include its declining Pepsi brand, only grew 1.3 percent. The rest of the segment’s growth came from Gatorade, it’s sports water Propel and Pepsi’s Aquafina.
And while Quaker’s food revenues were essentially flat last year, due in no small part to the low-carb trend, operating profit from that area of Quaker was up 3 percent last year and 22 percent the previous year.
On the beverage side, the Quaker acquisition has more than delivered for Pepsi, analysts say. And more so than ever, the interest is certainly in the brain power at Gatorade.
“The beverage business is about talented people,” said John Sicher, editor and publisher of industry publication Beverage Digest. “It’s about smart people getting the job done.”
Shake-up at Orbitz: With the online travel company Orbitz LLCcontinuing to look for a consistent marketing strategy, top brass is making changes in its marketing organization. Michael Sands, who had been the company’s chief marketing officer reporting to Orbitz CEO Jeffrey Katz for the past several years, is moving over to a new post overseeing new ventures for the company.
A spokeswoman for the company said the need for an executive to oversee growth opportunities drove the decision to create the new position.
Meanwhile, John Samuel, executive vice president of consumer travel, will oversee marketing. The company is searching for a vice president of marketing who will report to Samuel.
Quick hits: Jim Beam Brands brought in veteran beer industry executive Jack Hanzlovic to become director, regional promotional marketing, reporting to Beth Bronner, senior vice president of marketing. Hanzlovic has held various beer marketing positions over the years, working on everything from Budwesier to Old Style. . . . Brian Hickey, head of his own Evanston-based media representative firm, joins the Chicago sales office of The Wall Street Journal as an account manager.
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