PepsiCo modifies Indian model

30 November 2011

NEW DELHI: PepsiCo, the food and beverage giant, is tailoring its approach to pricing, innovation and generating consumer insights in India.

The firm enjoyed growth of 30% in India last year, to over $2bn in all, not least thanks to products made specifically for local shoppers, such as Lehar Iron Chusti, a snack range rich in iron, and with a starting price of just two rupees.

Manu Anand, PepsiCo's chairman in India, told the Economic Times: "We have attained this scale on the back of success of both our global platforms as well as 'Indovations' like Slice, Kurkure and Nimbooz."

Kurkure, a potato snack brand, has also been adapted to suit the tastes of south, west and east India, while Aliva crackers offer Original Masala and Mango Chutney flavours. "Indovation is central to what we do," Vidur Vyas, marketing director, foods, PepsiCo India, said.

Elsewhere, Gatorade, the sports drink, is on sale in its traditional form and as a powder, which reduces the cost for consumers. Similarly, Slice, a mango juice, is available in various sizes appropriate to a diverse range of customers.

"Value runs across the gamut of consumption," Samudra Bhattacharya, sales director, beverages, PepsiCo India, added.

As part of its broader model, PepsiCo divides the Indian market into three classes: "portfolio", "town" and "outlet". It also has five core channels: premium, core, value, organised trade and rural.

Tropicana juice and Lipton Ice Tea are in the "premium" channel, while the "core" contains brands like Pepsi and Lay's, and the "value" tier features lines including Gluco Plus, an energy drink costing six rupees.

Another initiative undertaken by PepsiCo has been partnering with Millward Brown to research food and beverage trends among shoppers in an integrated way, having previously done so independently.

"It helps us go consumer-out as against competitor-out earlier," Deepika Warrier, marketing director, beverages, PepsiCo India, said.

Learnings from India are also being applied overseas. Nimbooz, the non-carbonated lemonade, for example, became the basis for Mirinda Karkedeh, which contains hibiscus, in Egypt.

"Due to high bulk and low shelf life, packaged F&B [food and beverage] is not ideal for exporting large distances for marketing in other markets. What works well is to export the 'Indovation' idea to other markets where it can be manufactured locally," said Anand.

Data sourced from Economic Times; additional content by Warc staff