Pepsi's diversity push pays off
By Jia Lynn Yang

(FORTUNE Magazine) -- On Oct. 1, Indra Nooyi takes the helm at PepsiCo (Charts). And with that, the soda and snacks giant becomes the largest U.S. company by market cap to put a woman in charge. The Indian-born Nooyi is only the latest Pepsi alumna to become a FORTUNE 500 CEO. Brenda Barnes, now in charge of Sara Lee, spent 22 years at Pepsi. And in July, Irene Rosenfeld left Pepsi's Frito Lay snacks division to become CEO at Kraft Foods. There are others on the rise too. Dawn Hudson, president and CEO of Pepsi-Cola North America, was ranked No. 41 in FORTUNE's Most Powerful Women list last year.

Maybe it's something in the cola. More likely it's the culture. Since 2001, CEO Steve Reinemund has enforced aggressive hiring and promoting rules. Half of all new hires at Pepsi have to be either women or ethnic minorities. (Half!) And managers now earn their bonuses in part by how well they recruit and retain them. Today 25% of Pepsi's managers are women, up from 22% four years ago. Six of its top 12 execs are now women or minorities.

The diversity push is part of Pepsi's game plan to better understand the disparate tastes of new consumers as it continues to expand globally. That's probably the new CEO's biggest challenge. But Nooyi--who as Pepsi's CFO led its successful acquisition of Quaker Oats--should be up to the job. The thing that got her hired, after all, wasn't being a woman. It was being a sharp strategist.  Top of page