According to CEO Indra Nooyi, the group is “a business within a business, a small, entrepreneurial sort of agile group that’s thinking about the new age consumer that loves discovery brands, while allowing the big brands to thrive in the overall mothership.”
Revealing the US group during the company’s Q2 2018 results this week, Nooyi said that PepsiCo's DSD model can cause problems for the company’s smaller brands.
“If I look back especially the last five years of beverages, we have had some spectacular new products which for any small start-up company would have been a blockbuster,” she said.
“But for PepsiCo because we have put it through DSD system unless it reaches the scale of a LIFEWTR or bubly in the first 12 to 18 months, we can’t support it because many times the space has to come out of the core cooler or the core isle. And so we look at differential velocities and then the DSD system tends to kill it.”
Instead, The Hive will look to nurture promising new products in the most suitable way.
“It's going to be an entrepreneurial group that's going to take some of the best new products that we launched and reached a certain size, but we never really allowed it to thrive in the DSD system,” said Nooyi.
“We will nurture it and incubate it in whatever distribution system they think is the best for it. And when it reaches a certain size, we can decide whether it should come into the DSD system or not."