January 23, 2008 / 6:34 AM / 10 years ago

"Comfort foods" to resist U.S. slowdown: PepsiCo CEO

DAVOS, Switzerland (Reuters) - PepsiCo Inc PEP.N expects its business, based on “comfort foods”, to be resilient to a U.S. economic slowdown, Chief Executive Indra Nooyi said on Wednesday.

“In many ways we are countercyclical and it helps us either way, whether the market is up or down,” she told Reuters at the annual meeting of the World Economic Forum in Davos. “Roughly speaking, I’d say the current market turmoil doesn’t really affect PepsiCo in a significant way.”

Nooyi said rising commodity prices were a challenge for the maker of Pepsi Cola, Lay’s potato chips and Quaker oatmeal, but the group had the levers to overcome the challenge.

“How do we intelligently navigate through this? Through a mix of productivity, pricing and intelligent procurement ... while we are concerned about commodity inflation, we feel pretty comfortable that we will find a way through it,” she said.

The company has been diversifying to offset declining soft-drink sales in the United States, where consumers are turning to bottled water, tea and other alternatives that they consider healthier.

Some rival companies have looked to divest business but Nooyi said she had no current plans for selling off any brands.

She was bullish on prospects for the emerging markets, including the Middle East, India, China and Latin America.

Writing by Ben Hirschler, editing by William Schomberg/David Stamp

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