PepsiCo takes a liking to nimbu paani, milk drinks

THE good old Nimbu Paani and milk beverages are generating soft murmurs within PepsiCo India. If the new PepsiCo, CEO, Sanjeev Chadha, is to be believed, the cola major could soon hit the retail shelves near you with new localised product offerings. So PepsiCo is keenly looking at the traditional Indian options to expand its product basket in the Indian market. The company has recently activated its Gurgaon-based R&D lab, one of the only two outside of the US, to work over time and lead the Indian subsidiary to such localised products. “We are looking at all the needs that a beverage can fulfill,” Mr Chadha told ET in his first ever interaction with the media since he took over the reins of the company in January this year. “Considering that the non-cola market in India is till under-developed due to lack of choice, we want to step up the process,” he said. That’s the big shift, partly fuelled by market and cultural dynamics. Part of this shift includes the recent setting up of a nutrition advisory board on the lines of the red ribbon board that Pepsico has globally. The cola giant is also aggressively exploring new categories such as functional waters and healthy whites to expand its non CSD beverage portfolio in India. The company is in fact, going back to the drawing board to find that ‘sweet spot’ that combines the fun and ‘good for you’ proposition for the consumers to create a whole new range what is internally being referred to as ‘treat for you’. This is in line with ‘performance with purpose’ strategy laid down by the new Pepsi Worldwide Chairman, Indra Nooyi. The target is to align the company’s cola and non-cola on equal footing. While globally, Pepsi’s cola portfolio contributes 70% of the company’s business, it does 60-65% in India. Pepsi India hopes to expand its non-cola porfolio to bring the ratio to 50:50 in 3-5 years time frame. Elaborating on the company’s expansion plans, Mr Chadha said, “There are three major opportunities which have immense growth prospects in India viz, juice and juice-based drinks, functional water and healthy whites such as soya-milk, that have been recently introduced in countries like China and Vietnam.” Besides, the company plans to strengthen its Mangobased drink brand Slice, and introduce value-added or what it calls ‘advantage’ water under Aquafina. Chadha, through all these efforts expects to double PepsiCo’s business in three years time. He however, emphsised that innovation will not be confined to the non-cola portfolio, but spans CSDs as well. “Similarly, innovation would not be restricted to the beverage category, we are attempting the same across product, packaging and equipment,” added Chadha. For instance, the company wants to introduce its water brand, Aquafina’s in various pack sizes in the retail market. Inorganic growth apart, the company is eyeing acquisition targets across categories after a long hiatus. “Mergers and acquistions would be significant for us going forward. Barring water where we already have a strong brand in Acquafina, we are open to acusitions in any other category,” Chadha said. PepsiCo is currently looking to offer smaller single packs for Acquafina besides looking at flavoured water as a growth opportunity although the low profitabilty in this category would be a challenge, Chadha pointed out.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv/