By Alan Murray and David Meyer
July 11, 2018

Good morning.

When PepsiCo CEO Indra Nooyi first started talking about healthy foods a decade ago, her investors pushed back. Pepsi makes its money off of sugared water and potato chips, they argued. Don’t buck the tide.

But Nooyi was early in seeing changes in the market. And she also believed her company needed a purpose as well as profits. So she continued to push healthy alternatives—boosting them to 50% of the company’s revenue last year, according to Pepsi’s sustainability report, which comes out this morning. (CEO Daily got an early look; you can find it later today here.) “We’ve tried to adhere to the idea of a social contract once defined by British statesman Edmund Burke as a partnership between the living, those who have come before, and those yet to be born,” Nooyi writes.

Critics may complain Pepsi is still peddling a lot of sugared water and potato chips—and contributing to global health woes as a result. But Pepsi shows that while big companies can’t ignore markets, they don’t have to be slaves to them either. They can shape those markets, for the better.

Pepsi’s stock surged nearly 5% yesterday, in the wake of better-than-expected earnings.

More news below, including the release of a new list of $200 billion worth of Chinese imports that the Trump administration may subject to a 10% tariff.

By the way, I’m on the other side of the trade divide today, in Guangzhou, China, where we are making plans for our second annual Fortune Global Technology Forum (formerly Brainstorm Tech International.). The dates are November 29 and 30, and speakers include Sinovation’s Kai-fu Lee, Sequoia’s Neil Chen, Goldman Sach’s Kim Posnett and Mobike’s Hu Weiwei.

But the real stars of this event are the entrepreneurs from all over China who come here to participate in the Fortune China Innovation Awards. (Winners get a brand new car, courtesy of our sponsor Guangzhou Automotive Corporation.)

Understanding the recent explosion of technology innovation in China is critical to the future of all business. The event in Guangzhou is an opportunity for executives to meet some of those at the leading edge of Chinese innovation. More information here.

Alan Murray


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