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Pepsico - Fritolays India
During its 20 year presence in India, Pepsico (covered by US analyst John Faucher)
has built the largest food and beverage business in the country. Being No. 2 player in
carbonated beverage segment and No. 1 player in the branded snacks segment,
Pepsico now has retail sales of over US$1.5bn in India, growing at CAGR of 20%+
over last 15 years. Management is hopeful of maintaining similar growth rates going
forward as well and had announced plans to invest US$500mn in India over three
years (incldg 2009).
Over recent years Pepsico India has expanded its presence across food and beverage
segment aggressively. Its ability to reverse engineer into segments and price points
has helped it to meet consumer demand for localized products at affordable prices.
Key focus areas for Pepsico India going forward would be:
Enhance relevance of its products and drive value. Pepsico is looking to capture
the huge potential offered by miniscule penetration and per capita consumption of
packaged foods in the country. Besides strengthening the presence of its global
brands in the country (Pepsi , Tropicana, Lays), it has been one of the few global
companies with successful home grown brands like Kurkure snacks, Slice mango
drink and more recently Nimbooz lemon drink and Aliva salty crackers. Introduction
of lower price points (Rs 2, 3,5) has further aided customer acquisition and volume
growth for the company.
Increase distribution reach. Out of 8.5mn outlets for FMCG products in India, salty
packaged snacks reach only 2.9mn outlets providing enough headroom for raising
distribution reach. Pepsico reaches over 1mn outlets in India currently and is a
dominant player in modern trade. Further company has accelerated investments in
integrated IT platforms, Dedicated and customized Go To Market distribution
channels for different target segments and frequent retail outlet service to enhance its
channel efficiencies.
Creating a strong supply chain network. With 45 manufacturing plants in India
(16 owned, 29 franchise), Pepsico is now nearly spread across the country.
Investments have been made in varied manufacturing platforms, leveraging on
modern technology and global know how besides expanding the sourcing capabilities
with contract farming. Their potato contract farming program covers 10,000 farmers
and is a source of reliable competitive advantage versus the competitors.
There has been strong push to increase productivity and various cost cutting
measures have been deployed to achieve the same. Key ones being : a) Use of cost
efficient alternate fuels, b) Restructuring of manufacturing footprint by bringing
snack manufacturing units closer to market, c) Re-engineering the packaging, and d)
Optimisation of Network and Logistics.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Pepsico - Fritolays India
During its 20 year presence in India, Pepsico (covered by US analyst John Faucher)
has built the largest food and beverage business in the country. Being No. 2 player in
carbonated beverage segment and No. 1 player in the branded snacks segment,
Pepsico now has retail sales of over US$1.5bn in India, growing at CAGR of 20%+
over last 15 years. Management is hopeful of maintaining similar growth rates going
forward as well and had announced plans to invest US$500mn in India over three
years (incldg 2009).
Over recent years Pepsico India has expanded its presence across food and beverage
segment aggressively. Its ability to reverse engineer into segments and price points
has helped it to meet consumer demand for localized products at affordable prices.
Key focus areas for Pepsico India going forward would be:
Enhance relevance of its products and drive value. Pepsico is looking to capture
the huge potential offered by miniscule penetration and per capita consumption of
packaged foods in the country. Besides strengthening the presence of its global
brands in the country (Pepsi , Tropicana, Lays), it has been one of the few global
companies with successful home grown brands like Kurkure snacks, Slice mango
drink and more recently Nimbooz lemon drink and Aliva salty crackers. Introduction
of lower price points (Rs 2, 3,5) has further aided customer acquisition and volume
growth for the company.
Increase distribution reach. Out of 8.5mn outlets for FMCG products in India, salty
packaged snacks reach only 2.9mn outlets providing enough headroom for raising
distribution reach. Pepsico reaches over 1mn outlets in India currently and is a
dominant player in modern trade. Further company has accelerated investments in
integrated IT platforms, Dedicated and customized Go To Market distribution
channels for different target segments and frequent retail outlet service to enhance its
channel efficiencies.
Creating a strong supply chain network. With 45 manufacturing plants in India
(16 owned, 29 franchise), Pepsico is now nearly spread across the country.
Investments have been made in varied manufacturing platforms, leveraging on
modern technology and global know how besides expanding the sourcing capabilities
with contract farming. Their potato contract farming program covers 10,000 farmers
and is a source of reliable competitive advantage versus the competitors.
There has been strong push to increase productivity and various cost cutting
measures have been deployed to achieve the same. Key ones being : a) Use of cost
efficient alternate fuels, b) Restructuring of manufacturing footprint by bringing
snack manufacturing units closer to market, c) Re-engineering the packaging, and d)
Optimisation of Network and Logistics.
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