Pepsi reduces bottling business units

By Charlotte Eyre

- Last updated on GMT

Related tags: Pepsico

The Pepsi Bottling Group (PBG) this week announced it is realigning
its organisation, reducing its units in the US and Canada from
eight to six.

As the food and beverage industry moves away from snacks and carbonated drinks, the group said that it hoped the move will streamline operations and make the company more profitable. "The consolidation of our retail customers and consumer demand for more variety are the two primary market forces driving this realignment,"​ said Eric J. Foss, President and Chief Executive Officer of PBG. "By making organisational changes that reflect new market dynamics as well as investing in our supply chain operations, PBG will be better positioned to capture the full growth potential of our product portfolio, while enhancing our selling, service and operational capabilities,"​ he added. As well as reducing the number of business units, the company will eliminate 150 management positions and 550 hourly-paid jobs. The after-tax cash expenditures are expected to amount to $20m (€14.6m), Foss said, but he hopes that the realignment will result in savings of around $30m (€22m). While PBG profit growth in the US and Canada has been stagnant over the past year, sales have been strong in emerging markets such as Eastern Europe. In March, the company strengthened its position in Russia through a joint partnership with PepsiCo, now operating in the country under the name PR Beverages Limited.

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