It’s far from a golden era for Big Food CEOs. Shoppers are shunning their processed and packaged goods. Supermarkets are pressuring them to slash prices. And activist investors and the threat of the 3G-backed Kraft Heinz (KHC) cost-cutting machine continue to circle. Amid this tumult, a cadre of longtime industry CEOs have stepped down from their corner office perches in the past year.
And yet PepsiCo CEO Indra Nooyi remains. Not only has she been an industry leader since taking on the top job in 2006—identifying early the need to rethink the company’s portfolio of sugary drinks and salty snacks—but she’s also a stalwart of Fortune’s Most Powerful Women in Business list. Nooyi, No. 2 this year, has appeared on our ranking 18 of the 20 years it’s been in existence, the first time in 2000 as PepsiCo’s (PEP) CFO.
Nooyi sat down with Fortune to talk about how she’s managing the $63-billion-in-sales food and beverage giant during the most disruptive period of her tenure. Edited excerpts follow.
Fortune: About a dozen veteran Big Food CEOs have stepped down in the past 18 months. Irene Rosenfeld, who plans to retire as CEO of Mondelez in November, told me she won’t miss the 24/7 nature of the work. During her acquisition of Cadbury, everything would be fine when she’d go to sleep—then she’d wake up to chaos. How have you handled the job for so long?
Indra Nooyi: That’s because she slept in the night, and I didn’t [laughs]. I struggle to sleep, so all night the email pings, and I’ll get up every hour and answer. There are people who thrive on it, and people who struggle with this workload. And I thrive on it still. I’m used to this pace of working at this point. That’s what I like.
The industry is seeing a pace of change and disruption that we’ve never seen, even coming out of the financial crisis. It is changing in enormous ways. You’re going to have consolidation, disruption, and a shakeout in the industry. You’re going to see the emergence of new players.
You can look at it with pessimism, that, “Oh, my God, all of this is changing,” or optimism, to say perhaps this is the time to rewrite some of the rules and rebalance the competitive equation in the industry. I’m in the latter camp, and I’m looking at the world and saying, “Interesting times.” I just hope I have the energy to help us through it. Right now I do.
What are your strategies for making sense of all these shifts?
There are some books I’m reading now on disruptive technologies that give you a snapshot of how much the world is going to change. You read that and you sort of sit there, going, “But that’s not a world in 10 years—that’s the world today.” I was talking to [Uber cofounder] Travis Kalanick some time ago, and he was giving me all these great ideas, and I said, “Oh, I’m glad it’s not going to happen in my lifetime.” And he said, “It’s going to happen in the next five years.”
To me, people like [Andreessen Horowitz cofounder] Marc Andreessen, Travis Kalanick, and [Airbnb cofounder and CEO] Brian Chesky, these guys are people we should talk to once or twice a year. You just have to. It’s this hunger for knowing how people are thinking about disrupting your business or the world around you.
On the subject of disruption, how is Amazon’s acquisition of Whole Foods going to change your business and the food sector more broadly?
Amazon (AMZN) is one of the most powerful companies in the world. They’re playing beautifully on your psyche, knowing you better than you know yourself. They’re going to use those Whole Foods stores as replenishment and supply points. They’ve got this brick and mortar where they can understand how people shop, so it’s a learning tool. They have Whole Foods’ 365, which is a very powerful brand. They’re going to use it to go after some categories that make sense.
What they want to do is improve the quality of life for consumers by reducing the price on lots of items and removing every friction point. They’re approaching it in a very consumer-centric way, and they’re going to be an important force we should all be worried about.
Do you worry about it?
Constantly. But you don’t just worry about it—you partner with them. When a disrupter comes in, don’t look at it as, here’s someone who’s going to kill your business. Think of how they’re going to aid your business. When the dollar stores came in, we all said, “Oh, my God, the dollar stores.” Now we have great business with them.
Does the Amazon acquisition change how you partner with Whole Foods? Historically, it has not sold a lot of your products.
We have only Tropicana and Near East and some Quaker products at Whole Foods. Now I think we’ll work with Amazon to get more in there, without a doubt.
The Next Billion
Pepsi has 22 brands (7Up, Mountain Dew, and Doritos, to name a few) that bring in at least $1 billion in annual sales. But as Nooyi remakes the portfolio to be less dependent on soda—its namesake cola now accounts for only 12% of its sales—expect the future class of powerhouse products to have a decidedly different look. Here are some of the names leading the race to be among the company’s next billion-dollar brands:
Naked Juice
$923.9 million
Pure Leaf
$873.3 million
Sabra
$618.4 million
Source: Euromonitor, 2016 annual sales in retail channels sales figures.
How are you responding to consumers who say they want to eat healthier?
I think the consumer moving toward a Whole Foods and Trader Joe’s is still a fringe-ish trend. But we don’t want to give up that growth. So we have been moving our product line to create natural, organic, and GMO-free products.
Could we do more? Yes, but I worry about the availability of the raw materials. Being a large company, if we say something is organic, it better be organic. The labeling has very high standards. If anything, it’s a supply-chain challenge.
Research clearly shows people are wary of aspartame as a sweetener. But when you replaced it with sucralose in Diet Pepsi, consumers didn’t bite. What happened?
There’s a slight taste difference. It’s not a degradation. It’s slightly different. So what’s the problem? This was my biggest puzzle, to be honest.
What consumers think of as healthy is not always science-based. It’s perception, what your friends told you, what the newest story is on the blogs or social media. Some of it might not be based on facts. If you look at potato chips in Whole Foods, they’re not any healthier than Lay’s. In fact I would say Lay’s is even higher quality than what they sell. But just because it comes in a brown bag, people pay extra, thinking it is maybe natural, organic, or handmade. This is the reality of today, and we have to figure out how to market in these new times.
Is there a new category you want to get into?
It’s more about categories that are ripe for disruption. I’ll give you an example: hot beverages. It’s been coffee and tea forever. It hasn’t been disrupted yet. But you go to many local cultures, they drink a lot of other hot beverages. I have to light a creative spark here to get people to think differently. Don’t start with coffee or tea. What’s the best hot beverage that should be sold between November and March that’s totally different, that’s awesome, that people drink and go, “Why didn’t I think about this before?” That’s a space I think is ripe for harvesting, or for a Travis Kalanick or a Brian Chesky to walk in.
You were a Hillary Clinton supporter. But you also sat on President Trump’s business advisory council—and were criticized for not stepping down from the group before it was disbanded in the wake of his comments about the white supremacist rally in Charlottesville, Va. How do you think about these political issues?
Until the election happens, you can support any candidate you want. There was a candidate that represented the values that I liked, but the day after the election, whoever is elected President is my President. And I congratulated him on that. And even today, he is our President.
It was a well-thought-through idea to get these councils together to help the President debate and discuss certain issues. The political cycle operates in short cycles. The issues and resolutions are long cycles. This is where business can straddle the two.
I think in this case, perhaps some of the comments that had been made post-Charlottesville did create some consternation. If individual CEOs take action, it’s not good for anybody—then each of us becomes a media story. It’s not a decision any of us took lightly, but circumstances demanded that we step down as a group.
What went wrong with the Kendall Jenner protest ad, which received a lot of criticism?
I’ve thought about it a lot because I looked at the ad again and again and again trying to figure out what went wrong—because it was a peace march not a protest march. It was people in happiness coming together. I realized the scene that caused the most consternation was the final one, when Kendall Jenner gave a Pepsi to the policeman, and it linked back to Black Lives Matter.
This has pained me a lot because this company is known for diversity, and the fact that everybody who produced the commercial and approved the commercial did not link it to Black Lives Matter made me scratch my head. I had not seen that scene. And I take everything personally. The minute I saw people upset, I pulled it. And you know what, it’s not worth it. There were people on both sides, but at the end of the day, our goal is not to offend anybody.
What advice would you give women entering the workforce today?
Everybody has to enter the workforce knowing it’s a long journey. For women, know your journey is going to be tougher because you have so many other priorities to worry about. Today people would argue that men have the same priorities. Yes, but women were born with an extra gene that makes us worry about those things just a little bit more. I don’t know why—societal or genetic—but we worry about the family, the husband, evening’s dinner, yesterday morning’s breakfast, aging parents.
Because we have so many issues to worry about we have to compartmentalize even better. We have to develop more skills to write lists and learn how to prioritize. If you don’t know how to do it, go to a course to learn how to do it. I make a list every day of 50, 60 items, and I tick off what I’ve done—tiny things. If I’m carrying two to three items over to the next day, it feels great. People say multitasking isn’t very good. If I didn’t multitask, I have no idea how I’d survive.
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A version of this article appears in the Oct. 1, 2017 issue of Fortune with the headline “Queen of Pop.”
