PepsiCo’s non-carbonated drinks to shape its growth in India

 

PepsiCo’s new India head Ahmed El Sheikh’s role is all shaped out and he is all focused on consolidating the business and sustaining profitability, by concentrating on growth.

Carbonated soft drinks have an opportunity but it is lesser than the others,” Sheikh, who took over the reins of the food and beverage major from D Shiva Kumar. Sheikh, who has been tasked with doubling PepsiCo’s business in India in six-to-seven years, said hydration and juices segments are growing at a faster clip than carbonated soft drinks and will play a bigger role in transforming the company’s portfolio. “Carbonated is an integral part of our business, it is growing and will continue to grow. Is it the fastest growing category we have? The answer is no,” he said.

PepsiCo had spread itself too thin over the years by messing up its channel play; Sheikh said it has just turned profitable and credited Shivakumar and the Pepsi-Co India team with delivering results. The business had gone into a transformation phase for two-to-three years, which has resulted in us breaking even last year.

Sheikh has segregated the company’s food and beverage portfolio into sub-segments and has set a target for each. “Gluco Plus (affordable hydration drink) is not my target in modern trade, Himalayan (mineral water) is,” he said. “We have a large portfolio but do you want to play with every category in every channel, the answer is no. Setting the right priority between the segments is the job we need to do.”

However, the new president & CEO of PepsiCo India region sounded cautious. “It’s easier said than done,” Sheikh said. “This segmentation and to execute it in reality in a cost-efficient manner is very challenging and needs lot of muscles. We are working on building that muscle, including digitisation of total supply chain network.”

PepsiCo has been losing fizz in India year-on-year with non-carbonates and food accounting for a major part of its revenues.

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