PepsiCo India Holdings Pvt Ltd - Soft Drinks - India

Euromonitor International : Local Company Profile January 2011

PepsiCo India Holdings Pvt Ltd - Soft Drinks

India

List of Contents and Tables

Strategic Direction .................................................................................................................................................. 1 Key Facts ................................................................................................................................................................. 1 Summary 1 PepsiCo India Holdings Pvt Ltd: Key Facts ...................................................................... 1 Company Background ............................................................................................................................................ 1 Production ............................................................................................................................................................... 1 Competitive Positioning .......................................................................................................................................... 2 Summary 2 PepsiCo India Holdings Pvt Ltd: Competitive Position 2010 ............................................ 2

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PepsiCo India Holdings Pvt Ltd - Soft Drinks

India

PEPSICO INDIA HOLDINGS PVT LTD

STRATEGIC DIRECTION
PepsiCo India is one of the largest players in packaged foods and soft drinks in India. In 2010, PepsiCo acquired the approval of the Foreign Investment Promotion Board (FIPB) for additional equity investment of US$200million in its Indian operations. The bulk of this investment is expected to be dedicated to the manufacturing and health and wellness branding of its beverages in the country. In 2009, the companys beverage business achieved its highest volume growth in a decade. This has not only attracted more investment, but highlights the importance of having a diverse portfolio. Although the results were driven by the growth in its fruit/vegetable juices and bottled water for much of the review period, carbonates played a major role in 2009 and 2010 in volume growth.

KEY FACTS
Summary 1 PepsiCo India Holdings Pvt Ltd: Key Facts PepsiCo India Holdings Pvt Ltd 3B DLF Corporate Park, S Block, Qutab Enclave Phase III, Gurgaon 122002, Haryana, India +91 (124) 2880699 www.pepsicoindia.co.in Carbonates, fruit/vegetable juice, sports and energy drinks, bottled water
Company website, company research

Full name of company: Address: Tel: www: Activities:

Source:

COMPANY BACKGROUND
PepsiCo India Holdings was set up in 1989 as a wholly-owned subsidiary of PepsiCo Inc. PepsiCo India has a product range spanning most types of soft drinks present in India. As of 2010, the company had significant off-trade value shares in carbonates, fruit/vegetable juices, bottled water and sports drinks. PepsiCos packaged foods division operates under the Frito-Lay banner. The company has a pan-India presence with its well-established network of manufacturing plants, distribution centres and logistics capabilities. Nimbooz by 7-Up continued to post strong volume growth in 2010 as the nimboo pani category under juice drinks grew at breakneck speed. Competition in this product type has intensified with launches of Parle Agros LMN and Coca-Colas Minute Maid Nimbu Fresh. In 2010, the company introduced two major products in India, Pepsi Max and Gatorade Sports Mix. Pepsi Max - the low-calorie, no-sugar cola carbonate - was positioned as a macho brand on the lines of carbonates leader Thums Up. Gatorade sports mix introduced PepsiCo to powder concentrates. The powder format claims to cut down the unit price of Gatorades current ready to drink (RTD) format by around 50% making the brand much more affordable.

PRODUCTION
The company caters to the domestic market via 36 bottling facilities, which includes 13 company-owned and 23 franchise-owned operations. PepsiCos Frito Lay foods division also has three state-of-the-art plants. The company exports some products to neighbouring markets. It is not known to undertake third party manufacturing.

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PepsiCo India Holdings Pvt Ltd - Soft Drinks

India

In keeping with continuous efforts towards environmental sustainability, PepsiCo claimed in 2010 that it had reduced its water usage from 7.1 litres per litre of sold beverage in 2001 to 2.4 litres in 2010.

COMPETITIVE POSITIONING
With a sizeable off-trade value share of 24%, PepsiCo occupied second position among soft drinks players in 2010. This position was primarily down to its consistently strong presence as well as growth in all involved categories. As is the case with its largest competitor in Indian soft drinks, the companys overall off-trade value share declined gradually in the review period due to it deriving a significant chunk of sales (60% in terms of off-trade value) from the traditionally slow growing carbonates. Although carbonates is still the major soft drinks category for PepsiCo, the company is progressively marketing its offerings in fruit/vegetable juices, sports and energy drinks, and bottled water. Noncarbonated soft drinks, and especially juice drinks, are expected to be the potential drivers for forecast period growth. PepsiCo positions its products in the mid-priced and premium segments. While Gatorade and Tropicana are positioned at the premium consumer, almost all other brands focus on the mid-range consumer. PepsiCo has been active in updating its marketing campaigns as well as branding of some of its products in 2010. Launched in 2008, the Youngistaan (young generation) campaign for Pepsi added another dimension with a high degree of employment of cyberspace in its promotion. The Indian youth segment was also targeted with the MyCan, MyWay campaign focused on Pepsis new packaging in 2009. The company is also looking to expand the retail presence of its juice drinks Slice along with revamping its 7Up brand in 2010.
PepsiCo India Holdings Pvt Ltd: Competitive Position 2010 Off-trade value share 36% 21% 14% 12% Rank 2 3 2 2

Summary 2 Product type Carbonates

Fruit/vegetable juice Bottled water Sports and energy drinks

Source:

Company research, trade press (The Hindu Business Line), trade interviews, Euromonitor International estimates

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