Corporate America is losing one of its few female CEOs—and Pepsico PEP +1.41% is losing the woman who has become the face of its company after serving as its chief executive for the last dozen years.
Pepsico announced Monday morning that Indra Nooyi will step down as CEO on October 3, ending a 24-year run with the food conglomerate, half of which she spent as the company’s chief executive. Nooyi will stay on as Pepsico chairman until early 2019, the company said, in order to ensure a smooth transition to her successor, Pepsico president Ramon Laguarta.
“Leading PepsiCo has truly been the honor of my lifetime, and I’m incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve,” Nooyi said in a statement Monday morning. “Growing up in India, I never imagined I’d have the opportunity to lead such an extraordinary company.’
Nooyi has spoken openly about her path from India to the top of one of the largest food and beverage companies in the world, most recently at the Forbes Women’s Summit in June. There she recalled her earliest days in corporate America, when she had just two suits to wear: a black one and a beige one that she would alternate throughout the week. She was self-conscious about this, but eventually came to decide she brought more to the table than her sartorial choices.
“I decided after a while I was never going to win the looks battle. I focused on the brains part. I focused on doing the job better than anyone else could do it,” Nooyi said. The strategy worked, she said, because colleagues started coming to her for projects when they wanted something done, and done well. “I started to depend more and more on my brains and my hard work as opposed to how I looked or how I talked. Think of me not as a complete package, but a brain.”
That brain has helped navigate Pepsi through what can most diplomatically be called a “challenging” consumer environment. Amid global trends towards healthier eating and food as a wellness solution, a company like Pepsi—whose very name is the same as a drink with more than a day’s worth of recommended sugar—has needed to reframe its product portfolio. Under Nooyi, Pepsi opted to divide that portfolio into “fun for you,” “better for you” and “good for you” categories. At the end of 2017, the company said that the “better for you” and “good for you’ categories (which contain products like Quaker Oats, Sabra hummus and Naked Juice) now account for 50% of its product offerings, up from about 38% ten years ago. This helped translate into $63.5 billion of revenue last year, a 1% increase over 2016 full-year revenue.
“She has delivered strong and consistent financial performance, managing with an eye toward not only the short-run, but the long-run as well,” Pepsi’s presiding director on its board of directors, Ian Cook, said in a statement Monday morning. “As CEO, she grew revenue more than 80%, outperforming our peers and adding a new billion-dollar brand almost every other year. And shareholders have benefited: $1,000 invested in PepsiCo in 2006 is worth more than two-and-a-half times that amount today.”
There were, of course, some highly-publicized stumbles. In February, Nooyi said in an interview that Pepsi—which owns Frito-Lay and all of its salty snack brands, including Doritos—was looking into a version of Doritos chips that would be more appealing to women. This sparked outrage and a mocking #LadyDoritos hashtag until the company clarified that it was not engineering gender-specific Doritos. And in 2017, Nooyi was part of the CEO advisory councils to the president that ultimately disbanded after months of tumult.
On Monday, Pepsi described Nooyi’s departure and Laguarta’s appointment as part of a careful and systematic succession-planning process. Nooyi and her fellow board members said that Laguarta, who before becoming Pepsi’s president served as its CEO of Europe sub-Saharan Africa operations, is exactly who they want to steer Pepsi into 2019 and beyond.
“Ramon has a deep understanding of the changing preferences of consumers and other critical trends unfolding around the world, and he has demonstrated that he knows how to navigate them successfully,” Nooyi said. “Ramon has been a critical partner in running the company, and I’m confident he will take PepsiCo to new and greater heights in the years to come.”
Investors don“t seem to disagree: Pepsi stock is up in Monday’s premarket trading session, heading for a 1% gain at the open if the current trading momentum holds. Year to date, the stock is down 1.5%.