PepsiCo India has emerged as one of the largest F&B players: Vishal Kaul
Sanjeev Sharma | 25 Jul, 2020
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In an interview with IANS, Vishal Kaul, Vice President & Business
Head, Beverages, PepsiCo India, and Dilen Gandhi, Senior Director and
Category Head of Foods, PepsiCo India, said that within 30 years of its
establishment in India, PepsiCo India has grown exponentially to emerge
as one of the largest F&B companies in the country.
account of such a tremendous growth, PepsiCo India has committed to
invest over $2.1 billion in the country over a five-year period ending
"'As people adjust to the enew normal', in-home
consumption is witnessing a significant uptake. We are witnessing a jump
in both penetration and frequency of our food and beverage categories.
There is a growing demand for our larger packs as in-home occasions of
togetherness have increased manifold. While the consumers are looking at
in-home experiences and seeking convenience, they are also looking at
value," they said.
"While there have been some short-term head
winds due to Covid, we at PepsiCo are extremely optimistic about the
future and are committed to provide consumers the right portfolio of
products across food and beverages," they said.
"Even in the COVID environment, our categories are seeing robust demand and growth across most channels," they added.
Q: How is PepsiCo India responding with its business models to the Covid-19 situation?
The COVID-19 has led to a complete paradigm shift as everything around
us has changed- consumer behavior, retail landscape, competitive
Very early on, we realized there was no playbook to tackle the COVID challenge and the situation would continue to change.
we had to arm ourselves with taking quick decisions while not having
all the relevant information. To help us navigate the crisis, we
established 6 guiding principles: Being People Centric, Being Consumer
Centric, Being Customer Centric, Being Community Stewards, Being Agile
and Being Prudent. These were the lens through which we saw every
decision and we empowered our teams for agile decision making.
a time when stepping out for even essentials was fraught with risks,
making our product conveniently available for our retailers and
consumers was a key focus area. Hyper-local delivery emerged as a
solution and we invested in emergent channels like Ecommerce for both
B2C and B2B.
We partnered with Amazon, Big Basket, Grofers,
Swiggy and Dunzo to ensure uninterrupted availability of our food and
beverage products to consumers across locations with safe delivery-on
demand for all our consumers.
For B2B, we further strengthened
our existing Distributor model with the EB2B model, where we partnered
with Udaan and Big Basket to help small and medium businesses. This
partnership ensured our product portfolio was easily made available to
retailers, so that they can cater to demand in the market.
Q: How does PepsiCo view the big jump in consumption of snacks and beverages at home?
PepsiCo India has always kept a pulse on consumer trends and continued
to develop its portfolio in line with what consumers want. As people
adjust to the enew normal', in-home consumption is witnessing a
We are witnessing a jump in both penetration
and frequency of our food and beverage categories. There is a growing
demand for our larger packs as in-home occasions of togetherness have
increased manifold. While the consumers are looking at in home
experiences and seeking convenience, they are also looking at value.
order to serve the consumer better and rapidly adapt to their changing
requirements we have introduced a 1.25-liter PET pack in our beverage
portfolio at a very affordable price of Rs 50 which will enable the
stay-at- home times even more special for our consumers. We have also
introduced various combo packs for our food portfolio creating and
further driving in-home consumption.
Q: What are the investment plans for PepsiCo in India?
Within 30 years of our establishment in India, PepsiCo India has grown
exponentially to emerge as the largest Food and Beverage company in the
On account of such a tremendous growth, PepsiCo India
has committed to invest over $2.1 billion in the country over a
five-year period ending in 2022.
This commitment is a part of our
previously disclosed commitment to invest $5.5 billion in India and
includes our plan to double our manufacturing capabilities locally in
the next five years, to cater to the ever-increasing demand of our
products among the consumers.
In recent years, we have announced
an investment of Rs 514 Crores in a new foods facility in Uttar Pradesh
which will provide 1,500 direct/indirect jobs. We have also invested in
increasing capacity at our existing foods plants in West Bengal and
Maharashtra and have additionally proposed to set up a greenfield
project in Assam.
Q: What is the production capacity for the PepsiCo products, and has it reached pre-Covid levels?
We have resumed operations/ manufacturing across foods and beverages in
the best manner possible, ensuring that all guidelines regarding safety
of our employees are strictly adhered to. In the current environment
and limited workforce across shifts, we are trying to ensure that we can
meet the demand and operate at an optimal level to cater to our
consumers with their favorite snacks and beverages.
we remain committed towards our employees and our consumers and see an
uptake in both supply and demand in both categories.
Q: What has been the response to the Covid situation?
As brands look at engaging with consumers, the first and foremost part
is that the current situation requires brands to provide consumers with a
seamless and safe buying experience.
That apart, this is also a
unique opportunity to build an even more authentic relationship with the
consumers by listening to them and providing the functional and
While there have been new ways of ensuring
consumers had 24X7 accessibility of our products in a safe and hygienic
manner, Brands across the PepsiCo India portfolio have also initiated
interesting campaigns rooted into insights that we mined through the
real time social listening we do at PepsiCo For consumers, safety comes
first, and they are now refraining from going to crowded places and
prefer low exposure.
Hence, we partnered with SWIGGY and Dunzo to
provide our products across food and beverages at their doorsteps,
24X7. We also saw that with low touch format being the new trend, there
was a need to work with our partners to find low or no touch solutions
for dispensing water. After extensive research and trials, we were able
to finalize the Aquafina Low touch dispenser model as a product that we
could roll out now given it meets key criteria including safety of
consumer,practicality as well as economies of scale.
evolved in the way we communicated to our consumers with messaging that
were more relevant in current times. For example, Pepsi identified that
while social distancing was the new normal, however a lot of consumers
were either not aware of it or were not following it fully. Salaam and
Namaste, which were deeply rooted into Indian culture are actually the
best forms of contactless greetings, which was the need of the hour
during the COVID times.
In an endeavor to make these contactless
Indian greetings a part of pop culture, Pepsi introduced a digital
forward campaign that aimed at inspiring the world that greeting each
other with salaam/namaste is a perfect way to ensure social distancing
and yet maintain connections responsibly. It encouraged behavioral
change through adherence to social distancing norms in an entertaining
manner. The campaign broke all past records in India and made a
meaningful impact to the consumers' lives.
On the other hand,
LAY'S, started a special initiative for the many unsung heroes of India -
farmers, truck drivers, retailers, etc. e who continue to bring joy to
millions even in these challenging times. The brand partnered with Smile
Foundation to provide hygiene kits to over 40,000 families of such
unsung heroes. These hygiene kits contain masks and sanitizers, to
support these champions as they continue to work hard even in these
As part of the initiative LAY'S has also
collaborated with leading Indian brands like Airtel, ICICI Bank,
Parachute, Dunzo, Big Basket, JK Type, Vistara, Grofers and together
have thanked millions of these unsung heroes. We also had other brands
from our portfolio like Mountain Dew, Quaker, Tropicana etc do similar
contextual campaigns and the response from the consumers has been
Q: What have been the sustainability initiatives of PepsiCo?
In its role as a responsible social citizen, PepsiCo India has taken
several initiatives to contribute to the nation's ongoing efforts to
combat the COVID-19 outbreak. As part of its #GiveMealsGiveHope global
programme, PepsiCo India provided over 10 million meals to the
underprivileged and marginalized families impacted by the COVID-19
outbreak across India. The meals were distributed in partnership with
Akshaya Patra Foundation, Smile Foundation & CII Foundation, across
The company also extended support to the healthcare
and diagnostic facilities by providing over 35,000 COVID-19 testing kits
to government labs, supplementing their efforts to combat the pandemic.
Furthermore, the COVID 19 crisis has impacted the restaurants and the
workers significantly. It is forecasted that 4 out of 10 restaurants
would shut down. Pepsi initiated a campaign #PepsiSaveOurResturants, an
inclusive program where every time you order food and add a beverage to
your order and it can be any beverage -- Pepsi or any other beverage,
Pepsi will give that many meals to the restaurant workers who have
served us. Pepsi partnered with NRAI and Swiggy to bring this campaign
to life. The campaign has got great response as it has provided many
consumers an avenue to support the restaurant workers who have always
Q: What are the changing consumer patterns expected due to Covid?
The COVID-19 challenge is making both consumers and brands face a new
reality. Consumer behavior and pattern is emerging and evolving at a
fast pace. Some of the key insights that are emerging are as follows:
is the new TV: Consumers, customers, employees and our ecosystem
partners have leap frogged towards leveraging digital solutions and the
mobile is at the epicenter of all this. Be it work from home,
communication to consumers, taking orders from customers or Ecom,
consumers are practically dependent on their mobiles.
consuming content online, buying online and even engaging with extended
family and finds online. Therefore, it's important to jump shift this
capability and work with the ecosystem partners to strengthen this
#Value in Table Stakes: While value has always been
important for consumers, going forward it would become even more
crucial. The brands/companies who can re-engineer their business models
to deliver this via an advantaged model, would succeed in the long term.
Trust and Fun: We believe consumers would be looking at 3 emotional
benefits and brands that can provide the same authentically, would be
the ones that consumers would choose
- The first is Hope. Hope is
tied very closely to empathy. Brands need to be empathic and craft
messages which are reassuring and relatable to consumers in these
- The second is Trust. Now more than ever,
consumers need to see brands walk the talk in everything they do e
whether it is the core product promise or leading a cause to support
-The third is Fun. Today, consumers are working
twice as hard, donning multiple hats and with sources of entertainment
and recreation limited, a brand that can that can present an opportunity
for consumers to express themselves in a fun manner will be able to
build deeper connects with the consumers The situation would continue to
evolve and it is important we continuously have our ear to the ground
and we keep sharpening the strategy basis consumer needs.
Q: What are the initiatives to bolster the retail network by PepsiCo?
The pandemic has given rise to a enew-normal' world and we at PepsiCo
India have maintained a close look out on the evolving consumer behavior
pattern to be better prepared for the future. We take cognizance of the
fact that we need to cater to different audiences, be it consumers,
partners, distributors through different channels.
consumers, demand for online deliveries has soared since the start of
the stay-at-home order. Thereby, it was almost imperative for businesses
to enhance their Direct to Customer (D2C) channels like Swiggy, Dunzo
to ensure we have exclusive e-stores and a mechanism to cater to our
consumers at their doorstep 24/7.
By tapping the 'Daily Grocery'
on Dunzo's app, customers can visit the LAY'S E-store and get these
products delivered within an hour of ordering. The initiative has
currently been launched as a pilot in Bengaluru and will eventually
expand to 4 more cities across Mumbai, Gurugram, Delhi, and Jaipur.
the beverage category, we have tied up with Swiggy stores where we
ensure availability of our products to the consumer on demand and
delivery within 2 hours.
On the other hand, Aquafina has tied up
with a micro delivery platform OwO is for expanding reach into "At
-home" consumption of packaged water. From a consumer perspective, our
research has shown that consumers prefer dealing with apps such as OwO
as they find it convenient.
For the retailers and wholesalers, an
interesting emerging channel is the EB2B model, under which PepsiCo
India has entered into deep partnership with Udaan and Big Basket to
help small and medium businesses. They should always have access to our
product portfolio to ensure that they always meet demand. On the other
hand, we remain committed to the distributors and ensure that we grow
them and grow with them.
Q: How does PepsiCo view the recent agriculture reforms including the flexibility to farmers to sell their products?
Let's talk briefly about our collaborative programme and how that is
focused on working closely with the farmers and based on years of trust
At PepsiCo India, we are guided by eWinning
with Purpose' - our fundamental belief that the success of the company
is inextricably linked to the sustainability of the world around.
is at the heart of PepsiCo India, and the companies relationship with
farmers in India goes back 30 years. PepsiCo was the first company to
introduce own researched processed grade varieties in India in late
At present, PepsiCo is largest processed grade potato buyer
in India. To fulfill its chip grade potato demand locally, PepsiCo
developed largest collaborative farming for potato in India spread
across 13 states working involving over 24,000 farmers.
potatoes are then processed in 3 manufacturing plants which employ close
to 2,000 direct and indirect employees. The retention rate of farmers
being part of the collaborative farming program is as high as 98 per
cent. All the potato used in Lay's and Uncle Chipps is sourced from
farmers in India e in fact, PepsiCo is the largest buyer of chip grade
potato in the country today.
Q: What are your views on the outlook for consumer sentiment? Is it an essential versus discretionary choice?
India consumption story has just started and according to industry
reports, India will be the 3rd largest consumption market by 2025.
there have been some short-term head winds due to Covid, we at PepsiCo
are extremely optimistic about the future and are committed to provide
consumers the right portfolio of products across food and beverages.
in the COVID environment, our categories are seeing robust demand and
growth across most channels. Our robust and balanced portfolio across
"Fun for You" products like Pepsi, Lays Dew, Kurkure or "Better For You"
products like Lipton, Pepsi Black or "Good For You" products like
Quaker, Tropicana and Gatorade are getting greater acceptance from
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