She will be succeeded by Ramon Laguarta, 54—who will effectively become Pepsi’s sixth CEO. Nooyi will remain as chairman until early 2019.
Her resignation concluded a tenure, which was marked by efforts to adapt to changing consumer tastes and fending off pressure from activist investors.
“Growing up in India, I never imagined I’d have the opportunity to lead such an extraordinary company,” Nooyi said in a statement. “PepsiCo today is in a strong position for continued growth with its brightest days still ahead.”
Pepsi stock gained cumulatively 79% since she assumed the CEO role in October 2006, according to FactSet. That’s less than both the S&P 500, which gained 112%, and Coca-Cola, which gained 108%. Its net revenue experienced growth from $35 bn in 2006 to $63.5 bn in 2017.
It also faced challenges from upstart brands that had continues to threaten its market share, including once-dominant drinks like Gatorade. Pepsi’s North American beverage business has been more challenged that its snacking business – which continued to provoke questions about whether the giant would consider splitting the two.
Activist investor Nelson Peltz had taken a stake in Pepsi and had pushed for a split of the two businesses before withdrawing and exiting the company in 2016 after a multi-year battle.
Under Nooyi, Pepsi managed to steadfastly keep both the businesses together, arguing in favor of the combined leverage it gave the company over retailers. It sought to revive its North American drink business by throwing more support behind its core brands. Its efforts to revitalize its biggest brands included — the Pepsi Generation advertising campaign, the re-release of Mountain Dew Baja Blast and the launch of calorie-free Gatorade Zero.
It had also been continuously supporting its snack business. It announced in May, the acquisition of baked fruit and vegetable company Bare Foods. The deal can possibly serve as a building base for the broader business of plant-based snacks.
Nooyi’s departure is the latest among a growing list of recent departures in the food and beverage industry– as it faces the unprecedented challenge of remaking decades-old companies under the glare of the public eye.
Laguarta, a 22-year Pepsico veteran, has been president since September, overseeing global operations, corporate strategy, public policy and government affairs. Prior to that, he served in leadership positions in the European and sub-Saharan Africa divisions.
The international markets have been a strong point for Pepsi amid slowing growth and tougher retailers in countries like the US Pepsi this quarter reported 7% organic revenue growth in Europe, Sub-Saharan Africa and 6% growth in Asia, Middle East & North Africa.
The rest of PepsiCo’s senior leadership team will remain unchanged, according to the company.
PepsiCo’s premarket stock price rose a bit higher after the announcement.