(MONEY Magazine) – Roger Enrico is known for bold strokes. In 1984, when he was head of PepsiCo's beverage division, he made a splash by paying Michael Jackson $5 million to moonwalk for Pepsi-Cola, strengthening the brand's image as the hip alternative to Coke.

As soon as Enrico moved up to the CEO slot in 1996, he set about overhauling PepsiCo's slow-growing restaurant and beverage empire. Fast food was the first to go: the Taco Bell, Pizza Hut and Kentucky Fried Chicken chains were spun off as Tricon in 1997. Last year, PepsiCo sold a 60% stake in its bottling operations to the public. To fill a niche in PepsiCo's soft-drink line-up, Enrico acquired Tropicana in 1998. Now the transformation is complete. Today, PepsiCo gets 61% of its revenue and 66% of profits from the snack foods of Frito-Lay; and that share will slowly but steadily increase: Frito-Lay's sales are projected to improve about 7% for 2000 vs. 6.8% for those of Pepsi's soft drinks. Steering the company toward snack foods has helped; earnings jumped 12% in 1999, according to a PaineWebber estimate, while earnings were flat at Coca-Cola, which gets all of its profits from drinks. But so far, investors aren't nibbling: The company's share price has mostly stayed in the $30 to $40 range since mid-1996. MONEY's Eric Gelman and Natasha Rafi met with Enrico in January to discuss the outlook for the new PepsiCo.

Q. What has the restructuring accomplished?

A. The whole idea was to focus sharply on being the world's best food and beverage company. That means we would be a consistent and sustainable performer in terms of both the top-line results--sales growth--and bottom-line results--earnings growth. We're pretty much there now.

Q. Are you stressing consistency because you can't offer investors a high growth rate?

A. High growth is in the eye of the beholder. We think that in the consumer-products category, good, solid double-digit growth will put you right up into the world's premier companies. And certainly one of the aspects of premier companies is that they do deliver consistent performance.

Q. Where will your growth come from?

A. First off, you have opportunities in brands, you have opportunities in channels and you have opportunities in geography. PepsiCo has more top 10 brands in consumer products than any other company, and they're growing within their respective segments. We've also been moving into so-called New Age beverages with Lipton ready-to-drink tea, Aquafina bottled water and Frappucino. People think of us as a cola company, but Aquafina is the No. 1 selling bottled water in the United States.

Then there are the channels--over the last decade or so, the mass-merchandisers like Wal-Mart have been a tremendous source of growth for food and beverages, as have drug chains, convenience stores, gas stations and vending machines.

And the reality of building businesses in places like Russia, China and Eastern Europe creates a whole new opportunity for us. Frito-Lay is by far the most successful snack food company in the world, but we're in only 42 countries, so there's still plenty of opportunity for geographic growth.

Q. Will new products make a significant contribution?

A. Absolutely. Here's one I can tell you about. At Tropicana we've got a product in test called Drenchers, which is a 30% juice product targeted for children. You can expect to see us continue to develop the "nutriceutical" idea--nutritionally enhanced orange juice. And as new products come down from the biotech industry, orange juice is the perfect vehicle for them because it tastes good and you know it's good for you.

Q. Do you foresee technology having an impact on your bottom line?

A. Yes, technology is a big factor because we've got this huge operating system. In the U.S. alone we have over 30,000 routes that we run on Pepsi and Frito-Lay. I envision a day when we bring our product in to the stores and the retailers don't even look at it. We put it up on the shelves. They could care less what it is because the way they pay us is when it goes through the scanner on the front end--that creates the sale. I think we'll see this in a significant way with the larger retailers in the next five years.

Q. From an investor's standpoint, which companies should PepsiCo be compared with?

A. I think you should compare us with the really premier global consumer-products companies--certainly Procter & Gamble, Gillette, L'Oreal, J&J and our friends in Atlanta. We're not like a traditional food company--we're in much faster-growth categories than most of them.

Q. Despite all the changes you've made, your stock price has been stagnant for some time now. Why is that?

A. One factor is that we've been going through the restructuring, and people have taken a wait-and-see attitude. The investment community has been very supportive of the restructuring, but they want to see if the results come out the other end. These folks are now seeing us deliver on what we said we would deliver: Every quarter in '99 we met or exceeded expectations on earnings and profit margins.

The other factor is that food and beverage stocks, consumer products in general, have not exactly been in favor in the last year as we had a rush to the Internet and the exciting story stocks, I guess you might call them. And we're not an Internet company by any stretch of the imagination.

I've never been more optimistic about our prospects, but clearly it's time to step up the activity. I will be spending a great deal of time with the investment community in the year 2000.