The New Pepsi Challenge

Yesterday, PepsiCo announced the acquisition of Wimm-Bill-Dann (WBD) Foods for $3.8 Billion.  WBD, headquartered in Moscow, is one of Europe’s biggest dairy products companies.  WBD produces yogurt, milk, flavored milk, fruit juices, and soft drinks.  The company has a product portfolio of over 1,000 different types of yogurt and dairy drinks, and 150 types of fruit juices and fruit drinks. This acquisition is meant to allow PepsiCo to diversify its portfolio and pick up some health-conscious products.

Not surprisingly, PepsiCo rival, The Coca-Cola Company (TCCC), acquired Russian juice producer, Nidan, in September of this year.  Both companies have plans to invest heavily in Russia, China, and, other, emerging countries due to waning revenues in the U.S. and, other, developed markets.

PepsiCo, earlier, formed a Global Nutrition Group to help it create new products and cut sodium, sugar and certain fats across its portfolio, including chips in its Frito-Lay division. Earlier this year, PepsiCo said it was setting out to triple its sales of healthier fare to $30 billion by 2020. The WMD acquisition is part of that strategy.

It is certain that TCCC, if it hasn’t already, will take on that Pepsi challenge.

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