We will add two beverage plants this fiscal at cost of R1,000 cr

Written by Neha Pal | Neha Pal | Updated: Mar 10 2012, 10:31am hrs
To take on competition in the summer season, Pepsi has already rolled out two new flavours - Mirinda Orange Mango and Orange Masala. In an email-interview with FEs Neha Pal, chairman and CEO of PepsiCo India Manu Anand talks about the companys plans and strategies such as re-positioning for 7UP and its popular sub-brand Nimbooz. Excerpts:

Are you planning on any new manufacturing and distribution models this year

We have restructured our distribution networks so that even as we continue to spread our reach in the premium and mid-level segments, we have a lean, no-frills infrastructure to reach the rural and value segments. We have created a state of the art, segmented Go to Market (G2M) strategy based on three filters portfolio class, town class and outlet class. Based on this, we now have five G2M channels premium, core, value, modern trade and rural which are independent of each other and carry products catering to different sections of consumers. For instance, premium channel carries products like Tropicana, Lipton Ice Tea, core focuses on our food and beverage offerings like Pepsi and Lays, value and rural focues on products like Tata Gluco+, Lehar Iron Chusti and namkeens under the Lehar brand name, and modern trade straddles products across our portfolio.

What would PepsiCos strategy be for the summer season

We have started the New Year on an optimistic note with a new positioning for 7UP and its popular sub-brand Nimbooz. With Mirinda, we have launched two new limited edition flavours, Orange Masala and Orange Mango. Mango Slice, on the other hand, has launched its biggest campaign that has a clutter breaking consumer engagement idea at the core. On the foods side, we have introduced Lays Baked range. Through this range of chips targeted at young women, we are offering a variety which has 50% less fat, and promises great taste.

Are you planning any new manufacturing facilities, and if yes, where would they be located

We will add two more plants (one in north India and one in south India) for beverages this fiscal at an investment of about R1,000 crore.

How much growth do you see in terms of value and volume this year in India What is Indias share in the PepsiCos overall market

India is one of the top five markets for PepsiCo among all the international markets (outside the US) in terms of the scale of the business. Both our beverages and foods businesses are doing extremely well and have been growing consistently at a healthy pace. We will continue to sustain the growth momentum. We have already invested significantly in India and are committed to investing in the region to drive growth.

Are there any price hikes on the cards due to the rise in commodity prices like sugar

From an industry point of view, inflation is certainly a challenge. However, we are leveraging our global expertise in sourcing, supply chain management and production efficiencies to offset the impact. So far, we have managed well and tried not to pass on the impact of inflation to the consumer. We remain optimistic on our growth trajectory, however, if inflation is not checked the entire industry is set to lose.

How much does food and beverage contribute separately to the overall revenue in India Which products are doing very well for PepsiCo

While we cannot share absolute figures on our businesses and brands, we can confidently say that we are at a very exciting stage as a company in India. We are amongst the largest food and beverage businesses in the country and the next phase of growth looks even more promising. Our core portfolio is growing in high double digits and we are experimenting to enter new opportunities which could be growth drivers of tomorrow.

Are you planning any cut down in spend during slowdown

We are on a strong growth momentum in the country, and will continue to invest in our brands and customer centric innovation.

What are your expectations from budget

Our budget expectations are in line with other FMCG players, the main ones being consistency of fiscal policy for the companies to plan for medium term, clarity on GST implementation and concessions for agro-based industries to incentivise investments and growth.

A survey by Ficci has shown that India is going to be a water-stressed nation by 2020 and companies will find it difficult to get water What have been your initiatives in this regard

PepsiCo India is driven by its global commitment to sustainable growth, performance with purpose. In 2009, PepsiCo India achieved a significant milestone by becoming the first business in the beverage world to achieve positive water balance. Through various initiatives of recharging and replenishing water, we were able to give back to the community more water than we consumed in our manufacturing processes. In 2010, PepsiCo has further increased the amount of water saved and is now water positive by 4.3 billion litres, a fact verified by Deloitte Touche Tohmatsu India. In fact, we are building on this achievement and are now aiming to be water positive in water stressed states that we operate in.