PepsiCo bullish on India, increases investment at snacks plant in Uttar Pradesh to Rs 814 crore

Food and bevers major PepsiCo is "extremely optimistic" about future of Indian market despite short-term hewinds due to pandemic-related disruptions and increasing investment at its new greenfield snacks plant in Uttar Presh to Rs 814 crore to meet increasing demand, according to its India President Ahmed ElSheikh.

company is committed to double its business from snacks business in India and also increasing capacity of existing food plants in West Bengal and Maharashtra, and it has ditionally proposed to set up a greenfield manufacturing facility in Assam.

"While re have been some short-term hewinds due to COVID-19, we at PepsiCo are extremely optimistic about future and are committed to providing consumers right portfolio of products across food and bevers," ElSheikh told PTI.

PepsiCo India has emerged as one of largest food and bever companies in country in 30 years of its establishment in India and is looking to build furr, he ded.

"Looking ahe, we are committed to double our snacks business in India. In fact, we have increased our investment in our new greenfield snacks plant in Uttar Presh from Rs 500 crore to nearly Rs 814 crore, generating 1,500 direct/indirect jobs and enabling a local sourcing ecosystem," ElSheikh said.

India consumption story has just started and according to industry reports, India will be third-largest consumption market by 2025, he said.

As festive season begins, company expects an enhanced demand from categories like snacks, juices and or carbonated bevers led by sentiment of celebration.

"From an FMCG point of view, industry is seeing consumption revival, which we expect will only get better with furr unlocking and upcoming festive season," ElSheikh said.

Commenting on consumer trends, ElSheikh said 'in-home consumption' is witnessing a significant uptake and consumers are seeking convenience along with value.

"As people just to 'new rmal', in-home consumption is witnessing a significant uptake. re is a growing demand for our larger packs as in-home occasions of togerness have increased manifold. While consumers are looking at in-home experiences and seeking convenience, y are also looking at value," ElSheikh said.

He, however, said, "Affordability is key today."

PepsiCo has introduced 1.25-litre PET pack in its bever portfolio at a very affordable price of Rs 50 targeting 'in-home consumption' and introduced various combo packs in food portfolio.

While, in smaller packs, it has also strategised price points to meet both rural and urban demand.

"With Indian FMCG industry slowly showing signs of revival in COVID impacted world, we have apted quickly and re-strategised our price-pack programmes, enhanced consumer engment initiatives and doubled down attention on both B2C and B2B distribution models to meet consumer demand," he said.

According to a recent RoC (registrar of companies) filing by PepsiCo India, its profit after tax in FY 2019-20 increased to Rs 329 crore from Rs 36 crore in FY 2018-19.

Though its revenue was down 15.87 per cent to Rs 5,264 crore compared to Rs 6,257 crore in FY 2018-19 on account of franchising remaining bottling operations in south and west India to its bottling partner Varun Bevers Ltd.

"PepsiCo India's transformation journey remains on track -- third successive year of profit in FY 2019-20 which has been all about building 'a faster, stronger, better company' in India," he said.

Though its overall bever volume grew during FY 2019-20, its bever revenue was lower on account of franchising and impact of COVID-19 in last fortnight of March 2020. Its food revenue grew due to strong growth in Lays, Kurkure portfolio and Doritos.

"Focus on core brands yielded results with growth across portfolio namely Lay's & Kurkure portfolio, Lay's Maxx and Doritos. Similarly, Core brands drove bever growth, led by Pepsi, Mountain Dew & Slice," ElSheikh said.

Last week, in its global Q3 results, PepsiCo h reported organic revenue growth in some international markets including India.

"Within our international markets, developed market organic revenue growth increased 8 per cent and outpaced developing and emerging markets which increased 2 per cent," PepsiCo's chairman and CEO Ramon Laguarta h said on October 1, 2020.

Some table highlights include double-digit organic revenue growth in France, Australia, and Brazil, high-single-digit growth in India and mid-single-digit growth in UK, China and Russia, he said.