PepsiCo, Inc. will reorganize its North American soft drink business in a cost-cutting move that will cut 750 jobs and close a Frito-Lay plant in Kentucky.
The restructuring reverses changes made 18 month ago to consolidate its North American drinks business into one unit. The new plan calls for three separate business units: Pepsi-Cola, Gatorade and juices.
Pepsi-Cola, the PepsiCo Beverages & Foods division largest business unit, will remain in Purchase, NY. The cola business makes up 60% of the company’s North American carbonated soft drink volume. Last month, Pepsi unveiled a new ad campaign with the slogan, “Pepsi. It’s the Cola.”
Earlier this week, Subway Restaurants announced that it had selected Coca-Cola to be the exclusive supplier of fountain drinks to its restaurants, ending its 15-year deal with Pepsi.
A newly formed business unit combines Tropicana and Dole juices and juice-drink brands under one Chicago-based team. Greg Shearson has been named president of the juices group. Most recently he worked as president of the Pepsi-Cola and Quaker, Tropicana Gatorade operations in Canada. Tropicana North America President Jim Dwyer has resigned for personal and professional reasons, but will aid in the transition.
Gatorade will continue to be based in Chicago.
The Frito-Lay plant in Louisville will be closed during the first quarter of 2004. About 330 jobs will be affected, including some resulting from the planned closure of some manufacturing lines in Aberdeen, MD, and Jonesboro, AK. Another 275 job cuts will come in the North American beverage and food operations and 145 from its international beverage and snack operations.
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