Pepsi Product Managers Learn That We Want What We Should Not Have

by drjim on July 9, 2018

We do love our Doritos

We do love our Doritos
Image Credit: 0Four

When we think about all of the exciting product manager jobs that are out there, one of the ones that always seems to come to mind are the people who are in charge of the big soft drink products. One of the largest is Pepsi and those product managers must be working hard every day to try to keep the market share that they have and win even more. However, it turns out that the company, Pepsi, has a bit of a split personality when it comes to their product development definition. They have a very successful beverage half but they also have a very successful chip half. What are those Pepsi chip product managers up to?

Trying To Do The Right Thing

The Pepsi chip product managers have a bit of a dilemma on their hands. Their boss, Pepsi CEO Indra Nooyi has bowed to public pressure and has said that she wants to turn Pepsi into a company that provides the public with healthy food. In fact, when the Pepsi chip product managers take surveys of their customers the feedback that they get is that what consumers want to do is to eat healthy. However, when it comes time to make a purchase, what consumers are telling the Pepsi product managers is that we like our chips.

The Pepsi product managers had set a tough goal for them to accomplish back in 2010. What they said that they were going to try to was to be able to bring in $30 billion in this decade by selling nutritional products. In order to accomplish this, the product managers created several different lines of nutritional products. These included Quaker oatmeal, Naked juice, and Sabra hummus. However, that goal seems to have been just a bit too lofty. It has now been changed to simply stating that by 2025 sales of their nutritious products “will outpace” the rest of Pepsi’s portfolio.

With a company as large as Pepsi is, you would expect them to be launching new products all the time. It turns out that they have. Not all of their nutritious products have been a success. Failures have included True North nuts, Pepsi Next, and Miller Quaker yogurt. The Pepsi product managers also publically set goals to reduce the amount of sodium and fat in some of their key products by 2020.However, they have already fallen behind in their goal to make these reductions. To make things even worse, sugars are added to Pepsi products during the manufacturing process

Trying To Be Successful

At the end of the day, product managers are judged by how successful our products are. Over at Pepsi chips are actually very, very successful products. Doritos and Cheetos have been helping Pepsi’s profit margins to expand for the past 15 quarters and their stock price just hit a record high. Clearly, that would look good on anyone’s product manager resume. The harsh reality is that taste is the biggest factor when it comes time for a consumer to make a snack purchase.

A survey was taken and it revealed some things that really should not come as a surprise to any of us. 66% of the baby boomers who were surveyed and 53% of the millennials who were surveyed said that taste is what drove their purchase of snack foods. Another big reason for the popularity of these products is that when people get together, they like to snack on pretzels and chips, not granola and yogurt.

Pepsi product managers need to be aware that global retail sales of Pepsi’s three largest savory snack brands, Lay’s, Doritos, and Cheetos, have been growing at an average annual rate of 5%. Frito-Lay chip brands generated 52% of Pepsi’s profits last year. The Pepsi product managers divide the products that they offer into three major categories: good for you, better for you, and fun for you. Right now, most of the company’s profits are coming from the fun for you products.

What All Of This Means For You

There’s no doubt about it, Pepsi is a very large company. As is the case with most large companies Pepsi has a lot of different products that it sells. Since it is best known for its Pepsi beverage, in the past few years the company has come under attack by health advocates who want it to sell healthier products. The Pepsi product managers have been tasked with using their product manager job description to create and sell products that will be better for consumers.

The challenge that the Pepsi chip product managers have run into is with their customers. Although when we are asked, we say that we are looking for more nutritious snacks, when it’s time to check out at the store we are grabbing the ones that taste the best – the ones that are bad for us. The Pepsi product managers have set goals for themselves to sell more nutritious products over time; however, they have had to modify these goals because the ‘bad’ products have been selling so well. Although Pepsi has successfully launched some nutritious products, they have also had a number of nutritious product failures. The Pepsi product managers have to be successful to keep their jobs. They realize that taste is what drives customers when they are making a purchase. They also realize that a lot of Pepsi’s profits come from the sales of chips.

The Pepsi product managers are in a good place – their products are making a lot of money for the company. The challenge that they have before them is that the wrong products are the ones that are making all of the money! Going forward, they need to continue to create and push their healthier products because that is what everyone is saying that they want. However, at the same time they are going to have to continue to give us what we need – all the delicious products that contain the bad things that make them taste so good!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that Pepsi should just focus on the products that people are really buying even if they are bad for us?

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What We’ll Be Talking About Next Time

There are few product manager jobs that come with as much brand name recognition as those jobs that are associated with the top food brands. We’re talking about being a product manager for a really big company like Kraft Heinz, Kellog, and Mondelez. However, in order to be a successful big food product manager you need to have a lot of shelf space in each grocery store. However, shelf space is what is going away for these product managers. This isn’t going to look good on anyone’s product manager resume. What can they do about it?

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