PepsiCo’s Bottling Partner – RJ Corp- launches salty snack similar to Kurkure snacks

 

 

So the company that bottles Pepsi in India is now in the way to create tough competition for PepsiCo as Ravi Jaipuria, Pepsi-Co’s largest Indian bottling partner, is launching its own salty snack brand.

If one believes the industry insiders Jaipuria-promoted RJ Corp hassome products are unusually similar to product offerings under PepsiCo’s Kurkure salty snacks brand. The company, however, denied it would compete with Kurkure as the brand is priced at the entry level and will not compete with PepsiCo’s value-added products.

 

RJ Corp has launched its salty snacks under the brand nameKaabuli, andwould be sold through Jaipuria’s own retail venture JMart.

The move has not gone down well with PepsiCo; according to an industry official  and PepsiCo is said to be upset with RJ Corp.

 

While RJ Corp’s no-compete contract with PepsiCo is with beverages, both entities work closely and have leveraged cross-synergies, at the former’s retail and hospitality ventures. JMart, developed on lines of small-format convenience stores, operates over 80 stores as of now.

RJ Corp, with diversified interests across sectors, has said in the past that it hopes to cross $5 billion in revenues by 2020, from about $1.6 billion now. While PepsiCo has been pushing high-margin products such as Lay’s Maxx, it operates equally aggressively in the mass segment, especially to compete with strong regional brands such as Balaji Wafers, Prataap Snacks, Bikanervala, and Bikaji Foods.

Industry estimates peg domestic salty snacks market at over Rs 17,000 crore. Global researcher Euromonitor estimates the category to cross sales of nearly $5 billion, or about Rs 35,800 crore, by 2020. While regional strongholds have been giving stiff competition to established players in the segment with aggressive entry-level pricing, localised flavours and quick turnaround, two retail sources said PepsiCo’s snacks brands Kurkure and Lay’s are regaining share, with western snacks category leader Lay’s share growing incrementally.

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