How Pepsi's Incessant Management Shuffles Led To A Collapse In Sales (PEP)

The appropriate reaction to the news that PepsiCo has reshuffled its senior marketing management—again—is laughter.

The number of recent reorganizations at the beverage and snack group is now beyond a joke. At least 26 senior marketing managers have left Pepsi since 2008, and that's not counting the managers who stay with the firm but are shuffled from one brand to another, from snacks to beverages.

And this reshuffling hurting sales, as Pepsi's own SEC disclosures show.

Pepsi seems to regard senior marketing talent as a commodity that can be interchangeably plugged and unplugged into its brands. This, of course, is complete nonsense: The soda and snack businesses are totally different. Even if they weren't, Pepsi right now could benefit from a period of simple stability, if only to stop itself making elementary errors such as its morbid new global can design. (That effort features deceased singer and suspected child molester Michael Jackson—the man whose hair was burned off by Pepsi on a 1984 commercial shoot—on new cans.)

Want proof? Look at PepsiCo's Q1 2012 results.

• 1% volume decrease in total drink sales in the Americas.
• North America volume declined of 2.5%.
• North America volume declines were driven by a 4% decline in soda volume.

That decline is Pepsi and Diet Pepsi et al.—collapsing in the U.S., its heartland. If these reshuffles were working those numbers would look different.

Here, for the record, are the new names and titles, per Ad Age:

• Salman Amin, formerly evp/chief marketing officer, is now global chief marketing officer
• Brad Jakeman, formerly "president-global enjoyment and chief creative officer," is now president of the global beverages group. (He replaces the infamous Massimo d'Amore).
• Lorraine Hansen, formerly global chief marketing officer-hydration, is now president of the global snacks group.
• Enderson Guimares becomes president of the global nutrition group. He rejoined the company in 2011 after bouncing around in a number of roles.
• Sarah Robb O'Hagan is now president of the global sports nutrition group. She continues as president of Gatorade North America.
• And Brian Newman is now svp/strategy and finance.

Confused? Of course you are. In this latest re-ordering, three of the six executives affected appear to be getting new titles even though they're basically working on the same business as before.

Pepsi's other recent missteps include:

• giving a $2 million reward to d'Amore, whose tenure resulted in 8,700 layoffs;
• reducing employees' 401(k) benefits;
• raising the price of Gatorade so the brand lost market share to Coke's Powerade;
• telling Wall Street it would fire 100 of its ad agencies before it told the agencies;
• and letting the trademark lapse on the tagline, "The choice of a new generation."

2008

• Chris Kempczinski, vp/marketing. Went to Kraft Foods as svp of the U.S. Grocery Division.
• Russell Weiner, vp/cola marketing. Became chief marketing officer at Domino's Pizza.
• Cie Nicholson, svp/chief marketing officer. Is now evp/chief marketing officer Equinox.

2009

• Mike White, CEO of PepsiCo International (retired)
• Rick Gomez vp/marketing for waters, enhanced waters and juices. He went to a top marketing position at Coors.
• Jeff Urban, svp/sports marketing at Gatorade. Now a partner at Kids Sports Entertainment.
• Todd Magazine, president of Gatorade. Now President N. America/consumer healthcare at Pfizer.
• Jim McGinnis, vp/marketing for Tropicana. Now vp/marketing at Intuit.
• Dave Burwick, svp/chief marketing officer, PepsiCo North America Beverages. Now president, North America at Weight Watchers.

2010

• John Galloway, vp/marketing Gatorade.
• Ralph Santana, North America vp/colas. He went to become Samsung's chief marketing officer.
• Tom Silk,  VP Hydration. He went to KB Homes as svp/marketing.
• Danielle Vona, vp/marketing for the Propel water brand. She went to become chief marketing officer at Sonic Drive-in.
• Richard Burjaw, general manager of the Starbucks/PepsiCo partnership. Now a speaker and guest lecturer in Toronto.

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