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Matins ESADE with Xavier Orriols, Senior Vice President for Europe and President for Southwest Europe at PepsiCo
X. Orriols (PepsiCo): “The success of consumer goods lies in the complex balance between growing the fundamental business and taking advantage of opportunities generated by megatrends
• Mr. Orriols described the ten megatrends influencing the consumer goods industry and noted that the transformation has been more gradual in this industry than in music, travel, transport and other sectors
• By continuously improving its products, operating responsibly to protect the planet and empowering people, PepsiCo has become a successful global company that creates long-term value for society as well as its shareholders
29th May 2018 — “The success of consumer goods lies in finding a complex balance between growing the fundamental business and taking advantage of opportunities generated by megatrends, declared Xavier Orriols, Senior Vice President for Europe and President for Southwest Europe at PepsiCo, at the most recent session of Matins ESADE, sponsored by Bluecap and organised in collaboration with La Vanguardia. With more than 22 brands that generate an annual turnover of more than a billion US dollars each, PepsiCo brought in more than $63 billion in 2017, $11 billion of which came from Europe. The company’s brands are present in more than 200 markets and territories across the globe.
During his talk, Mr. Orriols reviewed the major trends in the consumer goods industry, which are disrupting the traditional model of success. He began by mentioning demographic changes, particularly the emergence of two very different consumer groups that “have very different ways of interacting with brands: millennials and older people.
Mr. Orriols also highlighted the hyperconnected lifestyle of today’s consumers, the growing awareness about matters of health and well-being, the success of small brands and the growth of discounters. “We have to adapt to these trends, he argued, “because we cannot change them. Another factor poised to transform the consumer goods sector is e-commerce, although Mr. Orriols acknowledged that “this process will be slower in our sector.
He then turned his attention to another important factor: the size of people’s homes, which influences the extent to which they consume products elsewhere. He also touched on the topics of geopolitical, regulatory and financial instability, the scarcity and uncertainty of resources worldwide, and the emergence of activist groups.
Mr. Orriols also mentioned various new capacities that are essential for the consumer goods sector: big data applied to understanding consumers better, excellence in digital marketing, the management capacity of big brands as well as smaller companies, and the comprehensive management of distribution channels.
Results with responsibility
“Being a socially responsible company is not a choice, declared Mr. Orriols. “It has to be an intrinsic part of your growth strategy.
PepsiCo’s vision of results with responsibility involves “the fundamental belief that our company’s success is inextricably linked to the sustainability of the world around us, he explained. “We believe that continuously improving our products, operating responsibly to protect the planet and empowering people is what allows PepsiCo to remain a successful global company that creates long-term value for society as well as for our shareholders.
Since 2006, when PepsiCo introduced its “Results with Responsibility vision, the company has achieved numerous milestones. “We have reduced the added sugars, sodium and saturated fats in many of our products and expanded our offering of more nutritious foods and beverages, he explained. “We have increased the efficiency of how we use water and energy in our operations, and we have promoted sustainable agricultural practices all over the world. Finally, he noted that PepsiCo has built a diverse, participatory culture and made a concerted effort to strengthen the communities where it operates.
Xavier Orriols, Senior Vice President, PepsiCo Europe & Africa SS and President Southwest Europe, keynote speaker at the forthcoming Matins ESADE talk, “Mega trends that will change the FMCG world.
A brief overview of today’s global FMCG scenario, and food and drink in particular, characterised by the obsolescence of certain competitive edges and the tough balancing act caused by sluggish growth in the main segments, and the changes needed to seize opportunities in smaller, fragmented segments but with exponential growth. These new dynamics are mainly the result of certain mega trends in this sector, such as new consumer behaviour as regards products and digital interaction, demographic changes, the boom in small brands via new channels, constant readjustments in the economic world and ever-increasing volatility due to geo-political instability, and the lack and uncertainty regarding the sustainability of natural resources. The outcome is a new scenario that poses enormous challenges, but offers many opportunities. Optimal management of both sides of this strategic balance, and of the operating models to activate them effectively and efficiently, is crucial for the future success of companies in this sector.