NEW YORK – PepsiCo Inc. (PEP) said on Wednesday it was shaking up top management at its key North American food and beverages division.
The company, whose brands include Gatorade and Frito-Lay (search), said Gary Rodkin, chairman and chief executive of PepsiCo Beverages and Foods North America, was leaving to pursue new opportunities. The 52-year-old Rodkin has headed the division since 2002.
Rodkin, who joined PepsiCo when the company acquired Tropicana in 1998, wants to run his own company, according to John Sicher, editor of industry trade journal Beverage Digest. PepsiCo declined to provide Rodkin for comment.
The company named two executives to replace Rodkin. Dawn Hudson will be president and chief executive of Pepsi-Cola North America, and John Compton will head up QTG, which consists of the Quaker Foods and Tropicana/Gatorade divisions, PepsiCo said.
Hudson has been a rising star at PepsiCo while Compton's background at Frito-Lay will help Quaker, said Smith Barney analyst Bonnie Herzog.
"While often a major management change can be disruptive, we believe the transition at PepsiCo will be fairly seamless," Herzog said in a research note. "Two known entities were promoted to replace Mr. Rodkin and both individuals embody PepsiCo."
Herzog reiterated a rating of "buy" on PepsiCo's shares following the announcement.
Both Hudson and Compton will report to Chairman and Chief Executive Steve Reinemund. Rodkin will remain with PepsiCo through June.
The company said in a filing with the U.S. Securities and Exchange Commission that it affirmed its 2005 profit forecast.
PepsiCo's North American beverage business in 2004 had sales of $8.32 billion, or 28 percent of the company's total revenue. The unit's operating profit grew 13 percent.
Quaker Foods, which PepsiCo has struggled with since buying the company in 2001, had sales of $1.53 billion during 2004. Its operating profit grew 1 percent during that time.
PepsiCo also created a new corporate oversight council for its drinks business comprised of Reinemund and PepsiCo President and Chief Financial Officer Indra Nooyi. The council will make decisions about strategy and resource allocation for research and development and other areas.
The moves come one week after rival Coca-Cola Co. (KO) announced changes to its management structure, creating a new position to oversee global marketing and advertising.
Shares of PepsiCo rose 72 cents, or 1.38 percent, to $53.01 in early afternoon trading on the New York Stock Exchange.