"The name of the game is expansion"

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category evolves someone could come out with better packaging, claims that the water is drawn straight from mother earth, but all that might take another four-six years. At present, the growth is in low teens.

What are you doing to make the sleeping giant—India’s rural market—awaken? Is it not possible to siphon off a portion of resources from the shrinking cola market to the rural market? What became of the Rs 7 Pepsi?

When you siphon, you have to siphon to the next level. That would be mini metros. At the moment, the name of the game is beverage portfolio expansion in the metros, category maximisation in mini metros and setting a distribution network in the hinterland. Distribution remains the biggest challenge in rural India. The Rs 7 Pepsi has now become the Rs 8 Pepsi.

The proposition was unsustainable at that price, even with the affor-dability index rising.

The pesticide controversy is history. With the benefit of hindsight, what would you have done differently to deal with the crisis? Would you have ordered a product recall on a scale that Nokia did?

No, there was no need for product recall as the pesticide levels were not of a significant level. The only mistake we made is not talking to our customers, as effectively as we did in the second round.

In retrospect, silence can be deafening in such a scenario. We should have educated the consumer in the scientific area in the very first round. But we were taken off guard. We had so much confidence in our product, it became a game of perception versus reality. In the end it didn’t really matter what was the reality.

From seeking celebrity endorsement, iconic brands often move to issue-based advertising. When will Pepsi grow up and move in that direction?

We already have—with Aquafina. As a corporate, we are committed to giving back the water we consume. The beverage industry as a whole consumes very little (0.4%) of the 7% consumed by all industry, but even then, at all Pepsi plants, we have started programmes for water recharge, rain water harvesting etc. All 35-odd Pepsi plants are zero-water balanced today and in the three years since this programme was launched, we have managed to save two billion litres of water. That’s a huge opportunity saving.

What’s next in the pipeline?