PepsiCo Gatorade Head O'Hagan Leaving Company
08/16/2012| 10:30am US/Eastern
--PepsiCo's Gatorade president leaving company
--PepsiCo names head of Western Europe to president of Americas drink business
--Moves represent latest changes in PepsiCo's largest division as it undergoes turnaround
(Adds details from the company, more background on Debra Crew and recent performance of Gatorade, starting in 6th paragraph. Also updates shares.)
By Paul Ziobro
The head of PepsiCo Inc.'s (>> PepsiCo, Inc.) Gatorade business, Sarah Robb O'Hagan, is leaving the company, the latest executive movement in PepsiCo's Americas drink division, its largest business.
PepsiCo said Thursday that Ms. O'Hagan, who had been credited with turning around the sports drink's sales in recent years by focusing marketing toward teen athletes, is leaving to pursue a new opportunity. She was Gatorade's president since the beginning of 2011 after serving as marketing chief for the brand for two-plus years.
Trade publication Beverage Digest reported Ms. O'Hagan's exit late Wednesday and said she's going to become president Equinox Holdings Inc., a chain of fitness clubs. Equinox didn't immediately return a call seeking comment.
Concurrent with Ms. O'Hagan's departure, PepsiCo is naming Debra Crew as president of PepsiCo's Americas Beverages, the division that encompasses PepsiCo's drinks business in North and South America. Ms. Crew had previously held the same title in PepsiCo's Western Europe business. In her new role, she will oversee Gatorade and juice brand Tropicana, PepsiCo's Latin America drink business and the company's North America warehouse sales organization.
PepsiCo has been shuffling management in its Americas beverage business over the last year as it has embarked on a turnaround focused on drinks, particularly sodas. Last year, PepsiCo named Albert Carey, who had headed PepsiCo's Frito-Lay North America snacks unit, to take over as chief executive of PepsiCo Americas Beverages, succeeding two longtime executives that co-ran the business.
Ms. Crew will report to Mr. Carey in her new role. PepsiCo also plans to name new leaders at Gatorade and in Western Europe in the coming weeks.
PepsiCo shares were up 0.3% in recent trading to $72.83, ahead of the broader market indexes, which were flat.
Ms. Crew brings a deeper experience in the packaged-foods space to Gatorade than Ms. O'Hagan, who came to Gatorade from athletic-goods giant Nike Inc. (>> NIKE, Inc.). Before joining PepsiCo in 2010, Ms. O'Hagan worked for candy company Mars Inc. as a general manager and chief marketing officer, and before that, at Kraft Foods Inc. (>> Kraft Foods Inc) and Nestle SA (NSRGY.)
With Ms. O'Hagan departure, PepsiCo is losing an executive who helped pull sales of Gatorade, PepsiCo's fourth-largest brand with about $4 billion in annual sales, out of the doldrums. She centered marketing of the brand toward high-school athletes, trying to recapture a demographic that had gravitated away from Gatorade. She also expanded Gatorade beyond drinks to include items like gels to consume before a workout and protein drinks to have afterward.
Sales of Gatorade have come back and were up double digits in 2011. But they've started to slump lately. Morgan Stanley said Thursday that in the latest four-week period tracked by Nielsen Co., PepsiCo's sales of Gatorade and other isotonic drinks were down 8.6%, with volume falling 10%.
Gatorade's been facing fierce competition from Coca-Cola Co.'s (>> The Coca-Cola Company) Powerade, which is gaining market share in the sports-drink segment. In the same period tracked by Nielsen, Coca-Cola's isotonic sales are up 10.1%, and it is rapidly gaining market share at PepsiCo's expense.
Gatorade's pre- and post-workout items have had a harder time catching on, although the latest items, "Energy Chews" and a new protein drink, are selling well. Gatorade also recently decided to pull its Gatorade Fit line-up of products geared toward hard-core fitness fanatics from store shelves because of poor sales. It plans to revamp the Fit line and reintroduce it in 2014.
Write to Paul Ziobro at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires