PepsiCo Moving Aggressively to Try and Pull Off a Big Transformation

Changing the status quo inside an over 110 year old company known for its soda has required massive investment by PepsiCo (PEP) chairman and CEO Indra Nooyi in research and development in the past few years. PepsiCo’s research and development spending has surged 35% since 2011, according to the company. The funds have been put toward bringing in experienced chefs to cook up internationally inspired food dishes that could be applied to a Lay’s potato chip, or test eclectic combinations of fruits and veggies to be squeezed into a new juice from the Naked brand. ‘We are not just investing for the sake of investing,’ said PepsiCo vice chairman and Chief Scientific Officer Dr. Mehmood Khan in an interview with TheStreet. The commitment to research and development has already led to several product wins for PepsiCo that are supporting its bottom line. Launched in 2013, 80-calorie Mountain Dew Kickstart is now pulling in about $400 million in annual sales, according to PepsiCo. Other successes, pointed out Khan, is Tropicana 50, a reduced calorie juice line that was launched after research showed consumers were diluting their morning OJ with water to cut back on sugar intake. TheStreet's Brian Sozzi reports from New York.