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 | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
More Tariffs
President Trump has announced plans to impose tariffs on a further $200 billion worth of Chinese imports, including industrial inputs and components. His dramatic escalation of the trade war—so far the U.S. has only put tariffs on $34 billion worth of Chinese goods—has rattled markets. Asian and European indexes are all in the red, and the U.S. is expected to follow. Commodities are taking a real hit, due to the likelihood of decreased Chinese demand for metals. Beijing says it is "shocked" and will be forced to retaliate. Financial Times
Pfizer Prices
Pfizer has backtracked on some of its plans to increase drug prices, following criticism by President Trump. The company says it will restore its prices to their levels before July 1, when it made the changes, and they will stay there until Trump puts into effect his plan to combat high drug prices, or until the end of the year if that plan hasn’t appeared by then. "Great news for the American people!" Trump tweeted. Wall Street Journal
Facebook Fine
Facebook is being hit with its first fine over the Cambridge Analytica scandal. The U.K.'s privacy regulator intends to fine the social network around $660,000, which is small potatoes for Facebook, but the maximum allowable amount under the pre-GDPR data protection law that applied at the time of the violation. The regulator has also warned political parties over their purchase of personal data from data brokers, in order to better influence people at election time. Fortune
Sky Bid
21st Century Fox says it has secured a deal to buy Sky, the British broadcaster, after increasing its bid to ward off Comcast's advances. Fox already owns 39% of Sky, and says it has won the approval of Sky's independent committee to take over the rest. CNBC
Around the Water Cooler
NATO Time
President Trump began today and tomorrow's NATO gathering by berating Germany for supporting the Nord Stream 2 gas pipeline from Russia. “It’s very sad when Germany makes a massive oil and gas deal with Russia where we’re supposed to be guarding against Russia and Germany goes out and pays billions and billions of dollars a year to Russia,” he said. "If you look at it, Germany is a captive of Russia." Bloomberg
Apple Theft
China's Xiaopeng Motors, also known as Xpeng, reportedly denied having anything to do with the alleged theft of Apple's self-driving car technology by a former Apple employee who went on to join Xpeng. Zhang Xiaolang allegedly downloaded a blueprint for a circuit board before making a dash for the airport—only to be arrested before he could board his flight to China. South China Morning Post
Uber HR
Uber's human resources chief has resigned after a probe into the handling of racial discrimination at the ride-hailing firm. Liane Hornsey appears to be the latest casualty of new CEO Dara Khosrowshahi's mission to revive Uber's reputation, following a bruising time under his predecessor, Travis Kalanick. However, Uber is not providing many details about what led to her departure. BBC
Kavanaugh Pushback
Brett Kavanaugh, President Trump's pick to replace Anthony Kennedy on the Supreme Court, has argued that judges' job is to "interpret the law, not make the law." Legal professor Carolyn Shapiro disagrees, writing for Fortune that such arguments are "misleading because they suggest that there are always neutral and objectively correct answers to the hardest legal questions, such as those the Supreme Court often decides." Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
