In an exclusive interaction with BusinessLine, Eugene Willemsen, Chief Executive Officer — Africa, Middle East, South Asia (AMESA) at PepsiCo, who is on an India visit, spoke on the growing significance of the Indian market for the AMESA region, untapped growth opportunities in smaller towns and rural regions and future investments. Excerpts:
How has India’s performance been in terms of contribution to global revenues in recent times?
India is one of the key markets for us in the AMESA region and also one of the strategic markets for PepsiCo globally. Infact, India is amongst the fastest growing markets in the region. It is a market with tremendous prospects and has gone through significant evolution over the past decade with factors such as investments in developing infrastructure and growing internet and smartphone penetration. So it feels that there are a lot of positive ingredients in place and then of course, you have the demographic dividend with a large young population. It is very clear that there is a significant potential to further develop the overall consumer packaged goods industry and in the categories that we participate in.
How has the pandemic transformed consumer behaviour?
There are a couple of things that we have noticed across multiple markets. Home has really become the hub again, especially during the pandemic. And that is something that we continue to see even post the pandemic. So in-home consumption is very salient and will continue to be significant in the future as well. At the same time, increased mobility post the pandemic has opened up opportunities to further drive away-from-home consumption and impulse consumption occasions whether its across restaurants or on-the-go.
How is PepsiCo tackling inflationary pressures, especially in emerging markets such as India where consumers are even more price-conscious?
There are different kinds of consumers in India, whether it’s rural or urban. Our strategy continues to be to cater to different needs of different consumers across different price points by leveraging the total pricing pyramid. There is definitely, also an opportunity for us to cater to the needs of consumers who are looking for some more premium experiences. Hence, we have recently launched Lay’s Gourmet which is a great step into the premium segment in the salty snacks category. So we are leveraging the total revenue management toolkit.
The company has invested over ₹1,000 crore in a new foods manufacturing plant in Uttar Pradesh. What are your future investment plans to ramp up capacity?
Investments will be made as and when the India business needs it. The Kosi Kalan plant (Mathura) has been recently commissioned and is a state-of-the-art facility with great talent. Talks are also on with the Assam government to set up a greenfield foods manufacturing facility there.
What is your view on the rural growth story in India?
With the development of infrastructure, big sets of unlocks are happening in tier-2, -3 and -4 cities. As you continue to see investments in infrastructure, rural India will be further unlocked with improvement in accessibility to the some of the most remote villages. So rural India will continue to be an important factor in the overall growth story.
Segments such as zero-sugar and low-sugar beverage segments are seeing faster growth in India. Do you see them growing in salience?
If you look at our portfolio, whether that’s in foods or in beverages, I think we’ve always been at the forefront of ensuring that we provide a very broad portfolio for different types of consumers. Our focus remains on providing choices to our consumers and addressing specific needs and we have done that with launches such as zero-sugar Pepsi Black and the new Quaker Oats Multigrain in India.
How is the Pep positive strategy playing out in India?
As a leading food and beverage company, we believe we have a role to play in transforming the food system and our Pep positive strategy focuses on an end-to-end transformation of the total food system. In India, efforts across the three pillars – positive agriculture, positive value chain and positive choices — will continue. So for instance, PepsiCo India recently partnered with N-Drip, a manufacturer of gravity-powered micro-irrigation system, to help farmers increase water efficiency. This technology has already been introduced in Uttar Pradesh, Punjab and Rajasthan to improve water efficiency levels across thousands of hectares by 2025. The PepsiCo Foundation has provided safe water access to over 55 million people worldwide, out of which more than 50 per cent beneficiaries come from India.
How is the innovation pipeline looking like and are you looking at bringing any global brands to India?
Over the past few months, innovations such as Lay’s Wafer Style and Lay’s Gourmet have been launched. We have also just launched Quaker Oats Muesli, an extension of the Quaker portfolio. So there’s a lot of exciting innovations happening. And of course, we continue to look at how we can further develop our business based on consumer needs across the country.