Oct. 1 (Bloomberg) -- PepsiCo Inc., the world’s largest snack-food maker, plans to increase advertising spending next year and is readying new Gatorade products to boost consumption, Chairman and Chief Executive Officer Indra Nooyi said.

PepsiCo maintained its ad budgets this year, taking advantage of media rates that declined 25 percent to 40 percent, Nooyi, 53, said yesterday in an interview in New York. The company also has shifted more of its spending to digital media, she said.

“Going into next year, at this point our plan is to increase advertising spending,” said Nooyi, declining to specify how much the company will spend. “We have gone almost a third to the digital world, which is profound because five years ago it was not there.”

The spending boost may help the Purchase, New York-based maker of Frito-Lay potato chips and Quaker oats grab market share when consumers move back to premium foods and beverages, including Gatorade. Sales of the drink declined after consumers switched to less-expensive beverages, including tap water, as the jobless rate climbed.

Nooyi said PepsiCo is preparing a “massive Gatorade transformation” geared to athletes and various stages of their workout regime. The company will introduce products formulated for different athletic needs, Chief Financial Officer Richard Goodman said Sept. 10.

Marketing to Athletes

PepsiCo, also the world’s second-biggest soft-drink maker after Coca-Cola Co., plans to provide more details about the products starting “around November,” Nooyi said.

There’s “an opportunity for us to move up the chain and have a larger portion of the budget of these athletes,” Nooyi said.

Mark Swartzberg, an analyst with Stifel Nicolaus & Co. in Florham Park, New Jersey, said PepsiCo can spend more to promote its products now that record-high commodity costs have subsided. That will probably bolster its market share, he said yesterday in a telephone interview.

PepsiCo fell 20 cents to $58.46 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 6.7 percent this year.

PepsiCo probably won’t see a “pop” in food and beverage consumption as the U.S. economy improves, Nooyi said. Food and drink companies performed relatively well during the economic slump so their shares won’t jump with a recovery, she said.

Consumer Shift

“We don’t think that this food and beverage business is going to explode because we never went into an implosion,” Nooyi said. “Even when the economy turned down, the one thing that people did not cut back on is food and beverage spending.”

PepsiCo has focused on international expansion, adapting existing products to local tastes and buying up regional companies. Nooyi said growth also will come from consumers who shift back to premium-priced foods.

“The whole country is in an age of thrift,” Nooyi said. “While we won’t see a big pop in consumption, what you will see is a pattern of consumption change.”

Snack and beverage companies are coming up for sale around the world as operators, including family-owned enterprises, look to generate cash, Nooyi said. Sellers include makers of snacks, juices and “liquid food,” such as smoothies and dairy-based drinks. PepsiCo will be choosy about acquisitions, she said.

PepsiCo agreed in August to buy Amacoco Nordeste Ltda. and Amacoco Sudeste Ltda., Brazil’s largest coconut water company. It also bought Peruvian corn-chip maker Karinto S.A.C. in April and in June agreed to buy a stake in Calbee Foods Co., Japan’s biggest maker of potato chips and shrimp crackers.

‘Tuck-In Acquisitions’

“Organic growth is a large part of our growth, but tuck-in acquisitions are a significant part,” Nooyi said.

Stifel’s Swartzberg said more purchases may aid PepsiCo’s growth in some markets.

“Particularly on the snacks side, we think there is a lot of white space internationally for them to grow,” said Swartzberg, who recommends buying PepsiCo shares.

PepsiCo said in August it would purchase its largest distributors, Pepsi Bottling Inc. and PepsiAmericas Inc., for about $7.8 billion, giving it control over about 80 percent of its North America distribution.

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

Last Updated: October 1, 2009 16:28 EDT