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Pepsico is optimistic about India
For food and beverage company PepsiCo, India remains a "massive opportunity” over the next decade, prompting the international giant to invest in its brands and infrastructure in the country to serve more drinks and chips to consumers.
“We continue to see a lot of growth in many parts of our AMESA region, in particular, India is a big growth space for us and it is an investment area for sure,” Ramon Laguarta, chairman and CEO of PepsiCo, said during an investor call Thursday. (AMESA stands for Africa, Middle East, and South Asia).
India opportunity
“The opportunity is massive if you take a decadal perspective,” Mr. Laguarta said. “We're putting infrastructure on the ground and investing in the brands to make sure that we build the scale to capture what is going to be a high-demand market for many, many years.”
Earlier this year, Pepsico India announced an investment of ₹1,266 crore to establish a flavour manufacturing facility in Ujjain, Madhya Pradesh. The facility is set to be operational in the first quarter of 2026.
The company announced its second-quarter and year-to-date 2024 results on Thursday. PepsiCo beat street estimates, but demand for snacks and beverages slipped in North America. The company had lowered its revenue forecast for the full year.
In the 12 weeks ended 15 June, PepsiCo's convenience foods unit volume grew 1% in the AMESA region, primarily reflecting double-digit growth in India and low-single-digit growth in South Africa. But that was partially offset by a double-digit decline in the Middle East and a low-single-digit decline in Pakistan. The company's beverage unit volume grew by 2%.
Coca-Cola's plans in India
Mr. Laguarta's comments come as several large consumer companies have promised hefty investments in India in recent years. Companies want to capitalise on the demand emerging from a growing consuming class and a young population. Earlier this year, John Murphy, president and chief financial officer of the Coca‑Cola company, had said the beverage major would re-invest a “significant portion” of its capital investment increase to build capacity for its India business.
In India, PepsiCo competes with Coca-Cola, ITC, Bikaji, and Haldirman's. It sells its portfolio of beverages as well as chips under the Lay's brand and oats under Quaker. Its bottling operations (beverages) are managed by its local bottling partner, Varun Beverages.
PepsiCo, which sells Lay’s chips and beverages under the Mirinda and Tropicana brands in India, said earnings grew by 28.5% to ₹8,128 crore due to higher sales of both food and beverages.
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