In this segment from MarketFoolery, host Chris Hill and Motley Fool Director of Small-Cap Research Bill Mann discuss PepsiCo (NASDAQ:PEP), which delivered its fiscal third-quarter report on Tuesday. The numbers weren't all that inspiring or surprising, but the situation the snack food and beverage giant is in today is far stronger thanks to outgoing CEO Indra Nooyi's efforts.

The pair talk about Frito-Lay, the expansion of the company's interests, and a bit about its next (highly speculative) possible growth space.

A full transcript follows the video.

This video was recorded on Oct. 2, 2018.

Chris Hill: Let's start with Pepsi, though, and Pepsi's third quarter. I'm not a Pepsi shareholder. I was kind of hoping this was going to be a great quarter only because this was the last quarter for Indra Nooyi.

Bill Mann: Great CEO!

Hill: Great CEO! She is now riding off into the sunset. It was a fine quarter. It was nothing particularly distinguishing.

Mann: It was a Pepsi quarter. I'm sorry to say.

Hill: Certainly, if you look at the stock over the last 12 months or so, this has been a steady as she goes kind of business. It's not lighting the world on fire.

Mann: No. But if you think about what they've done -- we can talk about the quarter if you want. But we're really talking about Indra Nooyi and what she has done and meant for the company. She's really transformed it. I think we've mentioned this before. It would almost be better if you'd name the company Frito Lay and Pepsi. That's a much more important division for them. They've actually continued to branch out. They now own Sabra hummus and Bare snacks. They're pushing a strain to try and get people to continue to consume sparkling beverages, sugared beverages, and they're not having a very easy time of it. But the company is in a much better place, and much less levered to that segment than they were when she took over.

Hill: If that's not No. 1 in terms of Nooyi's legacy, it's pretty high up the list.

Mann: Has to be.

Hill: The way she fought to keep Frito Lay at a time when there were a lot of people loudly banging the drum, "You have to split this off!"

Mann: Yeah. It was very strong for her to do that at a time when private capital said, "The financial transaction, we need to spin that out, we're going to unlock value." She really did see that it was going to be a stronger entity together than it was apart. And not only that, she brought additional verticals into the Pepsi family and has transformed the company. I really think, if it was just Pepsi and Gatorade now, this company would be in some trouble.

Hill: Oh, yeah. This is a completely different line of business, but if you look at eBay spinning off PayPal... just look at how those two stocks have diverged since that time. Not that eBay is a business that is in any way troubled, but it certainly hasn't had the brighter future.

Mann: No. I think that's exactly right.

Hill: One last thing. As you said, it was a Pepsi quarter. One of the things that's getting headlines in the wake of this report is, Hugh Johnston, the Chief Financial Officer, I was watching him on CNBC this morning. At the end of the interview, he got a question, and rightfully so, when you look at what Coca-Cola has done recently. He got a question about cannabis. Essentially, "Hey, are you looking at this?" And he basically said, "We're looking at it. I'm not going to tell you anything else."

Mann: That's smart of him to say.

Hill: Like, "There's no upside for me to tell you a damn thing."

Mann: One of the things Nooyi was talking about for opportunities for Pepsi was how to turn snacks into mini-meals. I love the branding. They're looking at lots of things. I think there's probably pretty good tie-in between cannabis and turning these snacks into mini-meals.

I'm sure this wasn't the way that she wanted to go out. But she should look back on what she's done with Pepsi and be very, very proud.

Hill: Tough act to follow.

Mann: For sure.

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