Dec. 15 (Bloomberg) -- PepsiCo Inc. Chief Executive Officer Indra Nooyi said she has no plans to buy any more beverage companies in North America and will instead look in-house for innovation.

Such acquisitions may not make sense and cost too much compared with developing new products, Nooyi said today at a conference in New York sponsored by Beverage Digest. Purchase, New York-based PepsiCo will “significantly” boost its research budget for new products next year, she said in an interview later with reporters.

PepsiCo and Coca-Cola Co. have spent the decade purchasing juice and flavored-water brands that other companies brought to market. Glaceau Vitaminwater, which Coca-Cola bought in 2007 for $4.1 billion, and Naked Juice, which had $150 million in annual sales when PepsiCo acquired it in 2006, are among the drinks that have helped the soda makers offset lost sales as consumer tastes changed.

PepsiCo, the second-biggest beverage maker after Coca-Cola, is seeking ways for small, up-and-coming brands to avoid getting lost in the shuffle of top-sellers such as Coca-Cola Classic and Pepsi Cola, said Nooyi, 53.

“What kind of distribution system can you put the new product in so it doesn’t get killed?” Nooyi said. “It’s not our innovation model that needs fixing, it’s the incubation model.”

PepsiCo would still consider buying snack makers in North America “if the right company comes along,” she said.

PepsiCo climbed 39 cents to $52.42 at 4:01 p.m. in New York Stock Exchange composite trading. Atlanta-based Coca-Cola rose 40 cents to $44.97.

To contact the reporter on this story: Duane D. Stanford in New York at dstanford2@bloomberg.net.

Last Updated: December 15, 2008 16:21 EST