PepsiCo to double India revenue in 5 yrs, invest in capacity building in key market

PepsiCo to double India revenue in 5 yrs, invest in capacity building in key market

PepsiCo plans to double its revenue in India over the next five years, considering the country a "key anchor market" where it is making significant investments to expand its operations, according to Jagrut Kotecha, CEO of PepsiCo India & South Asia.

India will serve as the "engine of growth for PepsiCo" in boosting its global revenue. The country is one of the top three markets for the multinational food, snack, and beverage company, where it is seeing double-digit growth, as he shared in an exclusive interview with PTI, Kotecha revealed in an exclusive interview with PTI.

The company has invested in greenfield plants in Uttar Pradesh and Assam to stay ahead of growing demand, said Kotecha. He also noted that the company is committed to making substantial investments in India and plans to open two additional facilities, including one in the southern region.

"We believe India will be the engine of growth for PepsiCo to drive the top line. Yes, it's not as big as North America because it is a lot more evolved category. Our per capita consumption in India is still very low, not only for us on beverage and food, but we would expect one of PepsiCo's fastest growing economies to do that," Kotecha said.

India currently ranks among the top 15 markets globally for PepsiCo. However, Kotecha expects the country to climb higher in the rankings, although he did not share any specific projections.

India is considered one of the "key anchor markets" for the food, snack, and beverage giant based in Harrison, New York, which re-entered the country in the 1990s after a 28-year absence.

"We have identified about 13 to 15 anchor markets for PepsiCo, of which India is there and the definition of anchor markets is where do we see our next five to seven years of incremental growth coming for PepsiCo globally and India being one of that," Kotecha explained. He also mentioned that PepsiCo "aligns very well" with the Prime Minister's vision for 2030, which aims to position India among the top three economies globally.

"It's one of the most stable economies, growth engine, etc and hence, PepsiCo also has been in this country for almost 30 years, good, strong, fundamentals," he said, adding “So, we need to double that, dial that up and start investing. We have been investing but continue to aggressively invest to ensure that we also take that opportunity." PepsiCo is working on three strategic pillars, which it calls it "faster, stronger, better". The company has divided India into nine clusters based on taste preferences. Moreover, it is also ensuring to be planet-conscious with sustainable solutions and building capabilities.

Last month, PepsiCo reported double-digit organic revenue growth in India, along with an increase in market share in both savoury snacks and beverages.

When asked about the timeline for achieving USD 2 billion (around Rs 17,000 crore) revenue in the Indian market, Kotecha said: "It's a vision. (We have) Aspiration to reach there, if we get everything right with the India infrastructure, I think it is there to take." "So, we are about over Rs 5,950 crore in 2023 (for nine months due to change in fiscal year) and since then we have been growing double digits from there. And if we continue to do that. So, that's where we are looking at what our numbers should be by that time," he added.

Kotecha mentioned that PepsiCo has built a greenfield plant near Mathura in Uttar Pradesh and is set to open a new facility in Assam, located in the North East, by the end of this year.

"The second one is in MP, which we have set up. Which again tells you where we are. We had built our Kosi plant about two or two and a half years ago, which we keep expanding. We have plans to open up in other parts of the country as part of that. So, we are not going to be investment shy. We are going to be investing forward to drive that growth because it is there for us to capture the (market)," he said.

In the last three years, PepsiCo has invested close to Rs 3,500-4,000 crore in the Indian market.

Besides, PepsiCo's bottling partner Varun Beverages Ltd (VBL) is also investing significantly.

" I think they have close to 41 plants. They have just invested in capacities, increasing by 25 per cent this year. They are continuing that type of investment to grow with us. Our partnership is pretty strong to enable that growth. Both of us feel very good about this," said Kutecha.

When asked about the entry of a new player Reliance's Campa Cola, which is disrupting the beverage market with ' Its aggressive price points and increased margin to the distributors, Kotecha said it is always good to have competition. Competition only helps to grow the category." "Our view is, yes, even before Pepsi and Coke were there, there were a lot of local, regional players," he said adding "Now Campa has also come with a lot of flair and expense and all. So our belief is the category will then grow and the consumption will grow." This will also help a lot of people to shift from unpackaged, unbranded into this category. Still per capita consumption is "far less", which is even lower than our neighbours such as Pakistan.

"We have to play to our strengths. And again, embedding everything that we do is consumer-centric, understanding the consumer and what their needs are, and play that game and play to our strengths," he said, adding " Somebody else will come and play with a slightly different strategy and play to that strength. So that's where we see. So we see it will be good for the consumer and it will be good for the market." It operates in the beverages segment with fizz brands as Mountain Dew, 7up, Pepsi, and energy drink Sting and sports beverages Gatorade, while in juices it has Tropicana and Slice brands.

PepsiCo operates in India through brands such as Kurkure, Lays, Quaker, and Doritos.

In 2023, about 80% of PepsiCo India's revenue was generated from the food sector, while the remaining 20% came from the beverages segment, which is handled by its partner VBL.

The Indian beverages market is worth approximately USD 12 billion and is expanding at a CAGR of 10-11%.

(with agency inputs)