First Lady Michelle Obama’s Childhood Obesity Initiative: PepsiCo’s New Focus on Healthier Foods

Posted by: Audiegrl

First lady Michelle Obama makes remarks at Fairhill Elementary School in Philadelphia, Friday, Feb. 19, 2010. Mrs. Obama's visit to Philadelphia was part of her efforts to curb childhood obesity. (AP Photo/Matt Rourke)

AP~PepsiCo, largely known for junk-food brands such as Doritos and Pepsi, is setting out to triple its sales of healthier fare in the next decade.

PepsiCo Inc. unveiled the new goal for brands such as Tropicana, Dole, Quaker and Tazo teas on Monday at an investor event. The company also backed its forecast for long-term earnings growth.

Governments around the world are exerting pressure on food makers to improve nutrition. But Pepsi is also making the case that it’s just as much consumer demand that’s driving the changes.

“Consumers are heading toward ‘good-for-you,'” PepsiCo CEO Indra Nooyi said Monday during the meeting.

PepsiCo expects more shoppers to buy based on nutrition as Baby Boomers age and people in developing countries get wealthier. Currently, about 18 percent of PepsiCo’s revenue comes from the lines it considers healthier, including Tropicana, Dole, Quaker and Tazo teas. Nooyi wants to triple $10 billion in revenue from such brands to $30 billion by 2020.

PepsiCo Chairman and CEO Indra Nooyi speaks to reporters during the PepsiCo media day and investor expo, Monday, March 22, 2010 in New York. (AP Photo/Mary Altaffer)

That may be a huge boost, but the nutrition business is still small compared with the company’s less-healthy food (it’s using the term “fun for you“) such as Lay’s potato chips and soda, worth $50 billion a year.

Nooyi said the two businesses require different approaches. The chips, soft drinks and other brands grow quickly and can have many different versions of brands, such as lime-flavored Tostitos.

But the nutrition business’ brands must not have too many variations so the brand remains the focus, and they must be led by people who have experience in marketing healthier foods.

“The potential for the growth of this market is enormous, and for a player who wants to play in this market intelligently, the opportunities are really incredible,” Nooyi said.

Many health leaders have urged food makers to make such changes. First Lady Michelle Obama has made the fight against childhood obesity a top priority. Last week she asked the nation’s largest food makers at a meeting of the Grocery Manufacturers Association to put less fat, salt and sugar in foods.

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