As a Pakistani-born doctor who grew up in England, studied nutrition and agriculture in the U.S. and consulted for the Mayo Clinic on diabetes and other diseases, Mehmood Khan has a background that gives him a broad perspective. His job gives him a daunting challenge.
Khan, 53, is PepsiCo's chief scientist and CEO of itsChicago-based Global Nutrition Group. It's his group's task to more than double Pepsi's healthier food portfolio to $30 billion in revenue by 2020.
Food companies are under pressure from government, consumers and special interest groups to address the epidemic of obesity, particularly in the United States. As more consumers seek out healthier snacks, drinks and meals, these products can be the fastest-growing piece of an otherwise mature portfolio. And some consumers are willing to pay more for them.
But PepsiCo is still primarily in the business of sodas and chips (from its Frito-Lay stable of brands). In fact, Pepsi is also planning to increase its core business, including Pepsi, Mountain Dew, Doritos and Cheetos, to $70 billion by 2020, from $48 billion at the end of 2010.
As chief scientist, Khan oversees efforts to reduce salt and introduce alternative sweeteners. And that puts the doctor in the unlikely position of selling what most people call junk food, but also helping to make it marginally healthier.
Sitting in his downtownChicago office, which is adorned with artwork and memorabilia depicting everything from his role at PepsiCo to the importance of looking at the big picture (a broken squash racket mounted on the wall is labeled "tough point"), Khan addressed what some might view as the contradiction inherent to his job.
A healthy lifestyle, he maintains, is all about balance. That means there are no "bad" foods, he said. Some of them you just shouldn't eat all of the time.
"There's no one prescription fits all," said Khan. "What is good and appropriate for my grandson is not appropriate for my 22-year-old college student son, which is not appropriate for me. ... It's what is appropriate for you at the quantity and at the time in your life. If we can make it easier for people to make better choices, then we've done a lot of good."
Khan also said that nutritional needs and taste preferences vary by region, and he noted the testing of a snack aimed at teenage girls in India. Iron deficiencies are very common in India, where vegetarianism is widespread, Khan said. Lehar Iron Chusti -- tea cookies or savory snacks resembling tiny, spicy, cheeseless Cheetos that are fortified with iron and B vitamins including folate -- is being sold for 5 rupees, or about 10 cents.
"This to an Indian girl in Bangalore is very delightful," he said, passing a sample across the table. But for young girls in the U.S., he added, it probably wouldn't be.
Khan is quick to acknowledge that the healthy-lifestyle battle is uphill. He points to a photo taken at a seminar for cardiac specialists. The snapshot looks down at a jammed escalator, with only two people climbing the adjoining stairs. One of them appears to be elderly.
"This is literally the world's experts on cardiology and it tells you everything, doesn't it?" Khan said. "It reminds me that having the knowledge and knowing what to do doesn't change anything, no matter if you are the people who are writing the books on that knowledge."
Khan took an unorthodox route to PepsiCo. He spent 11 years as a doctor and medical professor in Minneapolis and then four years with Lincolnshire-based Takeda Pharmaceuticals North America Inc., the North American headquarters for Japan's largest drugmaker, eventually serving as president of its Deerfield-based global research and development center. Takeda is best known for the diabetes drug Actos, the ninth-best-selling brand name prescription drug in the U.S.
He joined PepsiCo as chief scientist in late 2007. He was named CEO of the newly founded Global Nutrition Group last fall.
For this transition to food and beverage executive, Khan said, "I understand the science, but the opportunity is how to translate that for the global scale, and I could not do that as a practicing physician or in a policy role. I can do that when I'm in a business leadership role (at a company) where I have the opportunity to impact a much broader audience."
In Chicago, that means presiding over the Global Nutrition Group, comprising brands like Quaker, Tropicana, Gatorade, Naked Juice and Sabra. Khan and his team are looking at ways to make it faster, easier and tastier to eat a healthy breakfast or lunch. He said the group is looking at products that combine fruit, dairy and grains like oats in ready-to-eat form.
The Global Nutrition Group is very important to PepsiCo, said Beverage Digest Publisher John Sicher.
"If you look at PepsiCo's overall business, it's absolutely the right strategy to begin to dive that business into diversification into more health and wellness products," he said. Khan and his group's job is "really to drive innovation, and probably acquisitions," and since the initiative is particularly important to CEO Indra Nooyi, "it's taken very seriously inside PepsiCo."
Ten years after acquiring Chicago-based Quaker Oats for $13.4 billion in stock, PepsiCo plans to lean harder on brands such as Gatorade, Tropicana and Quaker to help build its nutrition credentials. Each brand faces challenges in the years to come, and none of its leaders report directly to Khan.
Gatorade's share in the sports-drink market it created has declined as competitors have proliferated. PepsiCo began refining Gatorade's target audience to serious athletes in 2009, seeking to sell lower-calorie drinks, like G2 or Sobe Lifewater, to less active folks who once glugged the higher-calorie drinks in aspirational abandon.
Tropicana has lost sales and market share for each of the last three years, according to data from SymphonyIRI, which does not include Walmarts and club stores. Tropicana Pure Premium, the top-selling refrigerated OJ by far, saw its market share decline to 32 percent in 2010 from 37 percent in 2007, and sales of refrigerated OJ as a whole slid in 2009 and 2010. PepsiCo executives have promised additional focus on Tropicana this year.
Quaker Foods North America has posted two years of declining sales. Khan, however, has said that Quaker "know-how" has played an integral role in creating products for other brands, including "energy bites" in Gatorade's G Series FIT, and a "drinkable oats" product launching in Latin America later this year.
Khan confirmed that PepsiCo is expected to seek partnerships and make acquisitions to build the healthy and "better-for-you" food business to $30 billion. One such grab was its purchase of 66 percent of Moscow-based Wimm-Bill-Dann Dairy and Juice Co. for $3.8 billion last December.
As chief scientist, Khan also is tasked with a variety of environmental and health initiatives, including the company's plant-based bottle, biodegradable chip bags, and ways of reducing salt and sugar in its core products, like Pepsi and Lay's Potato Chips.
The company is readying a proprietary "crystal" salt for production. Khan's team knew that people only taste a fraction of the salt they consume in part because the salt must dissolve before it can be tasted. Much of it gets swallowed before that can happen. The crystal salt dissolves faster, Khan says, allowing consumers to get the same taste with less sodium.
For sweeteners, the company has a number of tasters traveling the world to identify flavors and combinations that could provide suitable sugar alternatives. SoBe Lifewater and G2, the low-calorie Gatorade, both have their roots in this project, Khan says.
Khan also points to Trop50, a low-calorie orange juice created because the company knew dieters were adding water to their juice. Pepsi set out to make something that tasted better, using natural ingredients, Khan said.
But Khan and PepsiCo must also stay focused on the cola wars, in which Pepsi is slipping. The flagship soda fell behind Diet Coke in sales volume during 2010, according to Beverage Digest. To help stem declines, the company will begin testing a new Pepsi, now being called "Pepsi Next," with 60 percent less sugar than the original in parts of Iowa and Wisconsin next month.
To keep up with the demand for alternative sweeteners, Pepsi is now testing so many flavor combinations -- about 100,000 a day -- that it's turned to a robot, which identifies the samples that might be appealing to human taste buds.
Earlier this year Pepsi announced that it had developed a plastic bottle made entirely from plant waste. Now the team is working on scaling it.
The environmental path has been a somewhat bumpy one, however. Pepsi launched a biodegradable bag for Sun Chips last year, which was recalled after consumers complained it was too noisy.
"Don't worry," Khan said. "We've got round two, round three coming."
CAREER PATH HIGHLIGHTS
2010-present: PepsiCo, Chicago, CEO, Global Nutrition Group and senior vice president, chief scientific officer.
2007-10: PepsiCo, Purchase, N.Y., senior vice president, chief scientific officer.
2006-07: Takeda Global Research & Development Center, Deerfield, Ill., president.
2003-07: Takeda Pharmaceuticals North America Inc.,Lincolnshire, Ill.
2001-03: Mayo Clinic, Rochester, Minn., consultant, Division of Endocrinology; director, Diabetes, Endocrine and Nutrition Clinical Trials Unit.
1992-2001: Hennepin County Medical Center, Minneapolis, positions included director, Diabetes and Nutrition Program, division chief, Endocrinology, Metabolism and Nutrition.
1992-2001: Assistant professor, Department of Medicine, University of Minnesota, Minneapolis.
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