What about your suppliers and securing production?
Like everybody else in our markets, we are confronted with supply-chain disruption: shortages of cans, drivers, and potatoes.
Also, we are growing very fast. In combination with supply-chain disruption that is creating a lot of tension. Such strong growth
is relatively new in food and beverages. Five or six years ago in Western Europe, there was no growth, and companies – including mine – were focusing on efficiency.
Then, all of a sudden, growth happens, and we are moving to expansion. It is again a question of adaptability, which has an implication not just on resource allocation
(buying new lines, building new warehouses) but also on the mental model of the organization. It's very hard for an organization to be ambidextrous.
If you ask to grow and cut costs at the same time, the organization struggles. But you need to do both. We need to grow share and to make more profit at the same time.
It's the same as, “Who do you love more? Your father or your mother?” Of course, you love both of them equally.
So, how have you implemented the necessary changes?
In the first wave of COVID, we were trying to coordinate everything from the headquarters in Geneva, and that was impossible.
So we said, “Look, we have a set of principles: safety of the employees first; support our customers; protect the bottom line.”
Business units were asked to apply the principles as they thought appropriate, and it worked phenomenally well. You say,
“Just run the business within the framework.” You don't have to check every single step. This was a moment when we said, “OK, is there any bigger learning?”
We moved power from the top of the organization. For example, the traditional way for an organization to build capabilities is through
centers of excellence. The best person in a specific domain is appointed the head of the center of excellence. All of a sudden, they own the universal
truth and are ready to spread it to the masses. This makes it hard for the organization to adopt the new practices, as you have a lot of resistance
– in some cases justified. The role of support centers should evolve towards community coordinators and knowledge management coordinators.
From top-down coordination or control, we are moving to bottom-up co-creation.
Which caveats do you see by going back to a learning-from-each-other type of model?
The old concept is that everyone will say, “My market is different, and I have to do it on my own.” We need to embed a culture where people say,
“OK, it's smarter to partner together and co-develop an asset that will help all of us. It's better quality and much more cost-effective.”
When people develop things on their own you can impose an internal charge to discourage them. But if they collaborate and cooperate with others, they’ll get an advantage.
Consumers are looking for taste, convenience, affordability, and sustainability, in that order.
We understand sustainability is a big topic for PepsiCo.
In my opinion, consumers are looking for taste, convenience, affordability, and sustainability, in that order.
In Europe there is a lot of pressure to accelerate the sustainability agenda from our customers, our employees and from governments,
both East and West. After COP26 there is no more debate about the direction of travel. There is a debate about the speed of travel.
The European Green Deal and “Farm to fork” strategy are putting the European Union in the driving seat, but I also see increased momentum in Turkey.
I’m very proud that Europe is leading the work on sustainability for PepsiCo. PepsiCo has a strategy built around three pillars, which is faster,
stronger, better. It is all about what we need to do to grow faster, to future proof our capabilities to be stronger and how we
transform the business to be more sustainable. In Europe, our strategy is Better, Faster, Stronger. We place sustainability at the beginning of
everything we do. Last year we announced the new end-to-end transformation of our business, putting sustainability at our core. We call this PepsiCo Positive (pep+).
Through this we are looking to create a positive impact for both planet and people across three pillars: Positive Agriculture, Positive Value Chain and Positive Choices.