A House Of Brands or a Branded House? Lessons on Branding, Sustainability, and Culture from the Global CMO PepsiCo Foodservices

• October 22, 2020

A brand is nothing but a promise delivered. I shared this in my first book, The Mirror Test and it remains true today. Recently, I had the opportunity to address this with the Global Chief Marketing Officer at PepsiCo Foodservice, Scott Finlow, during a recent C-Suite Network Digital Discussion interview.

Throughout the years, PepsiCo’s culture remains relevant and I love how they’ve kept that consistency, specifically how they have leveraged amazing brands and successfully kept them connected to their customers. But, here’s the question — is it a house of brands or a branded house?

Finlow has an impressive background in the industry, but he told me that what attracted him to PepsiCo was the “amazing portfolio of brands.” What’s more recognizable than the Pepsi logo worldwide? Not very many things. PepsiCo is an overarching brand — a group of $23 billion brands from around the world. While they may have a food or beverage business that operate separately in some aspects, in the customer’s eyes, they are one. “Bringing those brands together is a critical component of how the value of PepsiCo is demonstrated,” Scott said.

In fact, the brand is the number one supplier in North America – up from number three a few years back. “Part of it is the power of the brand, part of it is coming together,” Scott added. Under the PepsiCo umbrella — all people, data, services, have come together seamlessly, despite being run as a decentralized organization.

It’s the nature of the beast – centralize, then decentralize, as it will change in 6 months. What’s the secret of their success? The empowerment of the talented people tasked with running each sector.

“Nationally great and locally even better” – that’s their ongoing dynamic and it’s what makes them feel good about where they are, according to Scott. He added, “Finding that balance between building capabilities is an ongoing dynamic in a lot of businesses, including ours.”

With big powers, come big responsibilities.

PepsiCo’s sustainability efforts are also a source of pride for them. They have a set of goals they want to enact by 2025, but the efforts aren’t as simple as wanting to be more sustainable. He threw an impressive figure to prove his point – 75 percent of consumers think recycling is harder than doing their taxes. “Consumers expect us to be part of the solution and help out,” Scott said. He continued, “We believe strongly that you can do good and do well as a business.”

These directives don’t live in a vacuum – but they come down straight from the top. Their shareholders play an integral role in the company’s sustainability efforts. For them, it’s a simple equation, improve shareholder results by increasing sustainability; it’s not a trade-off. The proof is in the numbers and their stock prices. Scott says that “In the end, it’s all circular. If you think of plastic as a packaging component, you have to make sure we’re investing in that entire ecosystem.” Basically, sustainability is good for business. It drives stock prices up, gives the brand more notoriety in the sustainable ecosystem, and the customers reward you with their loyalty. It is truly a full circle.

Like every other business out there, PepsiCo has been touched by the effects of COVID. With foodservice representing 20 percent of their total business, a $5 billion business, Scott describes “foodservice” as “where you are when you are not at home,” which translates to stadiums, restaurants, schools, theaters, etc. It’s obvious that industry has taken a huge hit; however, Scott is proud of the way the company responded to help – not just their own employees, but the communities they serve.

The first thing they did was look after their own people in the frontlines – those in stores and those serving others. Scott says they’ve come closer as a result of these efforts. The next thing they did was pivot to meet their customers’ needs, especially around deliveries. They have partnered with the Great American Takeout and Drinks On Us, a part of the Global Citizen program. PepsiCo has also raised money, $24 million, by partnering with Guy Fieri and the National Restaurant Association.

This shift was not in the plans back in February, so like everyone else, they’ve shifted to put processes in place to help others. I firmly believe it’s our duty as “Business First Responders” to take care of our employees, customers, and clients.

Big companies have a responsibility to respond quickly, and help. Scott says their focus right now is the people, those that have been impacted by his national pandemic. I think it’s our responsibility as citizens of the world. “To build a brand you have to have a purpose.” Scott said, adding “It helps us build a better world.”

As a brand, PepsiCo has been fully ingrained in pop culture and being in tune with changing customer behaviors over the years. However, culture is more than what’s projected to consumers. Culture is very much an internal issue as well. “This is part of what makes PepsiCo a great place to work,” Scott exclaims.

During this interview, we even discussed advertising in the Super Bowl and whether it was worthy or not. Scott believes it is worthy because it’s a way to bring the brand to life in a huge way in the U.S. market. With Super Bowl ads generating $412 million in revenue last year, it’s more than revenue for the brand. It’s the culture that goes with it as well as the halo effect that goes with it. Scott says, “If we stopped doing it, it just would feel like we’re missing a part of our culture.”

I want to thank Scott Finlow for this time and his insights on the transformation they have put into effect, and their continued efforts to elevate the brand and maintain their status as one of the world’s most recognizable brands. Listen to the full interview on “All Business with Jeffrey Hayzlett” here.