So we've pursued a strategy you could sum up in two words: focus and investment. You get your ducks in a row, then put some real money behind them.
Basically that means we're focused on consumer packaged goods businesses that play to our strengths - and we're out of businesses that others can do better. We successfully spun off our big restaurant brands and sold other businesses, ranging from a baby food company in Mexico to a candy company in Poland. We've teamed up with some strong bottling partners. We've also taken the critical step of separating the bottling and concentrate parts of our beverage business so both can operate more effectively.
Most important, we've invested billions of dollars in the heart and soul of our business: brands. We've been expanding distribution, creating innovative products and packages and adding powerful new brands to our portfolio.
The whole point is to make our businesses much stronger and more competitive for the long term - and able to weather economic storms and marketplace skirmishes with minimal disruption.
The beauty of the strategy is that it has generated billions of dollars in cash. That cash plus a big tax benefit we recorded in 1998 have enabled us to do two important things simultaneously: spend aggressively to reinvigorate sales momentum and deliver solid earnings per share growth. As that sales momentum continues, operating profit should follow - and I think you'll see signs of that in 1999.
So that's the big picture.
Of course, you might ask: Is it working?
I believe the answer is clearly yes.
PepsiCo is a very different company than it was a few years ago, with a much more solid foundation for consistent, long-term growth. And the best evidence is our improving volume. To me, that's the most fundamental measure of health in any consumer business.
But to give you a better sense of what I mean, let's look closer at each of our businesses.
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