Pepsi's Parth Raval on 2024: We have to get better and more sophisticated at planning

• Parth Raval is chief growth officer for PepsiCo Foods North America.
• The changes of the past few years are a chance "for us to build muscle in how we plan," he said.

Parth Raval is a big fan of planning, especially at a company like PepsiCo.

Pepsi created the growth office about three years ago as the organization got bigger and more complex. As chief growth officer for PepsiCo Foods North America, Raval has to balance the short term with the long term. He's responsible for brands including Quaker and Frito-Lay, and he says his favorite Pepsi product is nacho-cheese Doritos ("It's a classic item!").

Because of factors like high interest rates, higher-than-normal inflation, and the resumption of student-loan repayment, "how we spend and use our money is changing," Raval told Business Insider. "Everything costs more, and all organizations have been struggling with trying to get it exactly right."

While everyone wants lower prices and high-quality items, Raval said he'd noticed some differences across generations. Older generations, particularly boomers, want foods that are lower in sodium and healthier. Millennials and Gen Zers are looking for a lot more flavor, from different parts of the world.

Raval's insights are part of Business Insider's year-end leadership package, "Looking Ahead 2024," digging into vision, strategy, and challenges across corporate America.

The following conversation has been edited for length and clarity.

What are you looking forward to the most for 2024?

Continuing to build out and accelerate agendas around longer-range planning across supply and demand, and using technology to help us be more granular. This is easier said than done.

We're looking to leverage some technology vendor partners to start to build a much more sophisticated medium- and long-term forecasting engine. The fluctuations between supply and demand are part of the new normal, and we have to get much more deliberate and more sophisticated with our medium- and long-term planning.

Another area that I'm pretty excited about is thinking about our innovation and what matters most to our consumers. The key difference here is that we're not siloed. Even in the design of different products, we think about the implications across the chain in a much more deliberate way, but keep the consumer at the center.

The pandemic pulled the future forward by three to four years with respect to where shoppers purchase their products. So now we're focused on building what I call "new pipes" to get our products to market, whether it's our traditional sales operations in stores or a lot more online or a combination of the two.

We're focusing a lot more of our energy as we build out these new routes to market, because that's where the consumer is going.

What are you most worried about for 2024?

The macro outlook for 2024 — there's going to be a potentially wide range of outcomes.

While there's never any certainty, we do know that we need to start thinking about leading indicators almost quarterly. I see this as an opportunity for us to build muscle in how we plan.

Historically, you'd have this deterministic plan that comes together in October and November — we'd say, "This is the plan for next year." But I think we need to shift how we think about this and move from a deterministic view of the year coming down the pike to something that's a lot more probabilistic, saying: "Hey, these are the set of inputs. These are our assumptions and the scenarios that could pan out." And then get comfortable with planning and/or replanning and redeploying resources and investments accordingly.

What's one thing you got right in 2023?

Our innovation cycle and our innovation performance this year were very good. We introduced a lot of new innovative items to the market — things like mini canisters. You might have seen some of our really big brands like Doritos and Cheetos in a canister at retail. It's a new packaging format. It's portable. It's miniature. It's more on the go. We drove some really good innovation around meats and snacks.

The team accomplished this by connecting. The need for connection across our teams and across industries is so important. I know that sounds really basic, but it's in an organization that's pretty large. Things can get siloed at times, right? So we're ensuring we're threading that needle across functions.

What's one thing you got wrong in 2023?

A lot of companies have experienced some level of right-sizing post-pandemic. I think this was manifested in longer-range planning across supply and demand, as macroeconomic factors created an imbalance at times.

This created challenges in planning with precision. I'd say there were definitely opportunities where we got it pretty close, and then in other periods it was, "What happened that supply was lower than we expected or demand was lower than we expected?" It's actually something we're going to turn to in 2024 to do better, longer-range planning.