Indra Nooyi: ‘Companies like ours are little republics’

Indra Nooyi will have still water, thank you. The woman who ran PepsiCo for a dozen years stepped down as chief executive three years ago, so no longer needs to be seen sipping its namesake cola or nibbling Doritos in public. Besides, after spending so long defending its sugary drinks and salty snacks to anyone who blamed them for America’s obesity epidemic, she is not about to kick off a lunch with a journalist by plunging straight into a debate about calories.

Years after her children’s friends would ask their parents whether they were allowed the Pepsi she served at birthday parties, Nooyi has honed her message of moderation. She loves the taste of ice-cold Pepsi, she says with an enthusiasm mandatory for consumer products executives, but she drinks it just three times a week.

Nooyi may have left PepsiCo for lower-profile board roles at Amazon and Royal Philips, but she is still smarting from some of the coverage she received. As I set my phone to record our conversation, she does the same, seemingly to ensure she will not be misquoted.

We are in the Grand Salon restaurant of the Baccarat Hotel in Midtown Manhattan, a crystal company’s grandiose experiment in experiential branding. I tried to count the chandeliers while waiting for Nooyi to arrive, but gave up. Crystalline windows refract the taxis pulling up on the street below and throw rainbows over the champagne-coloured interior. It feels like sitting in a showroom.

Why here, I ask? Is this where she stays when she is in town? “No. I couldn’t afford it,” she smiles disarmingly, and it takes me a moment to remember that she made $85m over her last three years in PepsiCo’s top job.

Nooyi never earned the yet more stratospheric figures some male chief executives did but, after we meet, another interview appears in which she declares that she never asked for a raise because she found the idea “cringeworthy”. Before she can clarify that this was her upbringing, not her career advice, a legion of women who have learnt to “lean in” take to social media to explain, in stronger language, that they do not.

Nooyi has just published a book that she hopes will help more women reach the echelon she did. She was one of only 11 women running a Fortune 500 company when she became PepsiCo’s CEO in 2006, she observes in her memoir. There are now 41 women on that list, but that means 91.8 per cent of America’s biggest listed businesses are still run by men. The pipeline is not just leaky, she says, but broken.

In the years when the on-message executive was frustrating health activists, she was inspiring women who looked up a hostile corporate ladder and wondered how she had scaled it while staying married and having two children.

“You must have a menu you can share with us. Or tell us what’s going to change so we can make it to the top,” she recalls women saying to her. “And in every case when they ask you that question, I think pain, I think heartache. It was not a joyful conversation or a forward-looking conversation, it was just, ‘How do you do it? I’m tired.’”

A waitress arrives, and we must order. Chef Gabriel Kreuther, whose namesake restaurant a few blocks away has won two Michelin stars, has pared back the menu here to a point where the most exciting features are the prices. The pandemic’s disruptions to childcare have taken a toll on restaurant staff, Nooyi observes.

I opt for a lobster spaccatelli while Nooyi, whose options as a vegetarian are more limited, opts for a grilled cheese sandwich with tomato soup. It’s “exquisite”, she says. At $28, I would hope so.

She suggests she will order some fries as well, before urging me to have a starter. I demur and ask for a glass of wine instead. Nooyi sticks to her Evian and never orders the fries.

She returns to her book’s “moonshot” pitch for a better balance between work and family, rattling off figures on how few of the accomplished women who join companies such as PepsiCo reach the second or third tier of management. First they face unconscious bias and unequal pay, she says. Then “the biological clock and the career clock are in conflict with each other”. With too few support systems around them, too many “opt out of this incredible rat race”.

Nooyi’s own scramble to the top sounds grim to me. At Boston Consulting Group, Motorola, ABB and then PepsiCo, there were nights when she barely slept, months when she left home each Monday at 4.30am and returned from a bland hotel on Thursday night, and years when she was rarely home for dinner. “In some ways, I think of these days with great sadness,” she writes.

I had the biggest internal driver: I was an immigrant woman . . . and I was determined that I wasn’t going to let my family down

Corporate hierarchies were designed for an archaic vision of the “ideal worker”, Nooyi contends: male breadwinners who can go wherever employers want because their wives will take care of children, entertaining and everything else.

Rather than rejecting this model, however, Nooyi concluded that she had to be an ideal worker herself to succeed. She could do so, she tells me, because her husband Raj was willing to move to accommodate her promotions, while her mother and in-laws flew in from India to help with childcare.

“I had that support system,” she says, “but I had the biggest internal driver: I was an immigrant woman . . . and I was determined that I wasn’t going to let my family down.” Or India, she adds. As an Indian-born female executive, “I was a window into what Indian talent was about.”

Nooyi was born in Madras (now Chennai) in 1955 to a Hindu family who pushed her educationally and encouraged other talents. At Catholic school she attended seminars designed to groom the country’s future leaders, while playing guitar in a girl band called the Log Rhythms. In college, she organised its first women’s cricket team before collecting her bachelors degree at 18.

She now prizes her seat on the International Cricket Council’s board, but when she moved to the US in 1978 to attend Yale’s business school, she made sure to learn the rules of baseball.

As an immigrant, “you have to be yourself, but you have to blend in too”, the Yankees fan says. She had gagged at her first taste of pizza but, determined to fit in, learnt to love it.

Our plates arrive. A shelled lobster claw sits atop my pasta, which is tinted FT pink by a rich, Parmesan-heavy bisque. Nooyi’s sandwich is a minimalist rectangle. The sommelier is out of the wine I ordered but pours another, pricier, option in a glass large enough for a midsized crustacean to bathe in.

Nooyi’s book has landed as Covid-19 has injected new urgency into our endless debates over the future of work. Remote working should be routine even post-pandemic, she argues, but businesses and governments must do more to provide flexible jobs, predictable hours and an affordable infrastructure of care for young children and old people alike. Much of this, such as her call for 12 weeks of parental leave, chimes with Joe Biden’s care agenda, which business objects to funding with higher taxes.

The US remains the only OECD country not to guarantee paid leave, but Nooyi believes this benefit saved her from falling off the corporate ladder at several critical moments. “I am a product of paid leave,” she tells me, recalling how employers gave her time to care for her dying father, recover from a car crash and stay home with her newborn children.

So what’s stopping businesses from offering more leave and more care? Cost concerns and the belief that “families are not our problem”, she replies. But when PepsiCo offered benefits such as 12 weeks’ maternity leave and childcare centres, it was no social programme: “We were doing it because that’s the way we thought we should make money.”

We were doing it because that’s the way we thought we should make money

A similar profit motive drove the strategy that defined Nooyi’s time at PepsiCo. Early on, she outlined a “performance with purpose” agenda under which the maker of Mountain Dew and Walkers crisps would “nourish humanity”, “replenish” the environment and “cherish” employees.

Colleagues groaned and one investor mockingly called her Mother Teresa, but so many companies have since adopted the rhetoric (if not the reality) of stakeholder capitalism that the flowery language now sounds routine.

Nooyi defends the financial logic of moves such as cutting its factories’ water use in drought-prone areas (“If we don’t, we’ll be shut down, and rightly so”) but says CEOs need to “internalise” the case for change or outsiders will force it on them. “I hope it doesn’t have to be [spurred by] taxes and punitive damages like I was facing in my early days at PepsiCo,” she admits.

Which brings us back to that “nourish” part. While Nooyi was pumping out sustainability reports, PepsiCo was lobbying against soda taxes and food labelling bills, funding friendly academics and suing New York City to stop mayor Michael Bloomberg from killing “big gulp” soda servings. As for “replenish”, Greenpeace was still calling PepsiCo one of the world’s biggest plastics polluters as Nooyi stood down.

Her defence boils down to this: it is hard to change a giant company, but if critics think PepsiCo was hypocritical, then governments, investors, the media and consumers were equally so.

I accept all the criticism, but you should understand I’m trying to do the right thing. Give me some tailwinds!

She had to fight her own organisation to introduce sugar-free drinks, healthier crisps and compostable packaging, she says, claiming that the sodas and snacks politicians wanted to tax accounted for just 2-3 per cent of our daily calories. “It’s nothing,” she protests.

Those “sin tax” revenues weren’t spent on improving public health, she adds. Journalists, meanwhile, derided PepsiCo as a junk-food company only to question her portfolio changes, and investors brandishing environmental, social and governance targets also wanted ever greater quarterly earnings.

“I inherited this portfolio,” she tells me, “and here I was working to change it in spite of all the criticism. And I accept all the criticism, but you should understand I’m trying to do the right thing. Give me some tailwinds!”

The obesity crisis “would have been even worse had [the food and drinks] industry not done what it did”, she says. “On the one hand you’ve got the industry doing its part and saying ‘we’re going to reduce the calories’. On the other hand, society is getting more and more and more sedentary.” Covid-19 only exacerbated that as people stayed home on their devices and had their food delivered: “You sat there and you ate it, and you didn’t have to go out and exercise because nobody was out and about.”

Fired up, she continues: “It’s like somebody eats a dish — 2,000 calories — and drinks a Diet Pepsi with it. Think about it — 2,000 calories for just a starter and then you drink a Diet Pepsi and go, ‘See, we’re not drinking the sugary drink.’ No, but you’re not supposed to eat that 2,000-calorie starter!” 

I’m glad I skipped the appetiser.

Dietary indiscipline is not Nooyi’s style. “If I eat a grilled cheese sandwich, which I know is a little bit outside my caloric intake for lunch, I know mentally I need to cut back at dinner or just do a little bit more exercise,” she says.

She sees consumers similarly resisting her industry’s efforts to address a plastics pile-up that embarrasses her, she admits, reminding me that she sits on Prince William’s Earthshot Prize Council.

“I said to William . . . there’s a push and a pull. Companies can do a lot to reduce plastic in their offerings etc, but if the consumer doesn’t demand bottles that are recycled . . . You can only do so much as a push.”

But Nooyi directed a multibillion-dollar marketing budget for years, I point out. Isn’t marketing all about creating consumer “pull”? It’s not marketing that’s needed, she replies. “It’s education of the consumer, not by PepsiCo but by scientists, by society.”

Having just outlined corporate America’s limitations, however, she makes the case that business — not government — should lead the response to environmental and social challenges, with activists cheering it on.

“To be honest, companies like ours are little republics,” she says. “We have market capitalisations bigger than many countries of the world. We are engines of efficiency. We can make change happen without having to go through political systems. We ought to lean in to work on these issues. And I think in many ways activists and some investors didn’t give us the tailwinds.”

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When she gave up the trappings of a small country’s leader, “I thought I was going to be bereft,” Nooyi confesses. “I knew employees, their families. I was much loved, and I loved in return. I loved with my heart and soul.” Yet she claims not to miss the company driver, the company plane — or even the company.

Our plates cleared, Nooyi declines dessert or coffee. But she is not about to leave without confirming that I have heard her message. “If we don’t bring family, and women, and supporting them, into the centre of our conversations about the future of work, I think we are shooting ourselves in the foot,” she recaps. “I just want to make sure that you hit on my moonshot.”

Andrew Edgecliffe-Johnson is the FT’s US business editor

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