Pepsi prospers in India

19 October 2009

NEW DELHI: PepsiCo has "had one of the best years in the last decade" in India in 2009, and is already enjoying the benefits of its heightened investment in the country, according to Sanjeev Chadha, head of the company's operations in the fast-growing market.

The food and beverage maker has spent $210 million (€141m; £129m) in the Asian economy this year, with its total national revenues rising by 30%, and carbonated drinks sales by 50%, over this period.

It has previously announced an intention to devote considerable resources to a number of key target markets, and has also launched a variety of smaller, low-cost products in India to suit the specific price needs of its customers there.

According to Sanjeev Chadha, its local ceo, "India, as we all know, is a land of huge opportunity, and there is a tremendous runway ahead of us and we are really honestly just at the beginning."

"PepsiCo does see India as a very important market, and I definitely see PepsiCo investing more in the coming years as well."

Alongside improving its infrastructure, much of the soft drinks giant's funding so far has been delivered to R&D and "building new capacity for our products," Chadha added.

Pepsi and 7Up are among the US corporation's international products that have driven growth this year, with smaller brands like Gatorade and Tropicana also performing well.

However, "on the beverage side though, the single fastest growing brand across all beverages in India is Mountain Dew, and it has been the fastest growing in the last three years running now," Chadha said.

Nimbooz, a lemon drink, developed for the Indian market, and launched earlier this year, has also been a "runaway success".

Similarly, Desi Beats, a snack brand, and Aliva crackers, both of which were introduced in the last 12 months, "are seeing tremendous consumer response," Chadha added.

One challenge going forward could be the rise in commodity prices, the cost of which may ultimately be passed on to consumers.

"Price increase certainly cannot be ruled out, we are looking at all options right now," Chadha concluded.

Data sourced from MoneyControl; additional content by Warc staff