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Recognising India's potential as a key market, food and beverage major PepsiCo has plans to invest $ 500 million in its India operations over the next three years to triple its revenue in the next five years.
"As a tangible sign of our continued confidence in India, I am delighted to announce a further investment of $ 500 million in the next three years with the goal of tripling our business here," Pepsico Chairman and CEO Indra Nooyi said on September 21.
The announcement comes a day ahead of Pepsico's 26-member senior leadership team executive committee meeting, which started today.
The investment would be spread over manufacturing capacity, market infrastructure, environment sustainability initiatives, R&D and agriculture. Nooyi said the new investment will generate 50,000 direct and indirect jobs in India. PepsiCo has invested $ 700 million since its entry into the country in 1989, employing 4,000 people directly and some 60,000 others indirectly.
She added that PepsiCo was also open to acquiring local brands or companies for expanding. "We are constantly on the lookout to grow both organically and inorganically," she said. The company is also open to expanding its existing capacities as well starting greenfield plants. At present, PepsiCo has 43 bottling plants in India, of which 15 are company-owned, while 28 are owned by franchisees.
Identifying the health and wellness platform and value-added products as opportunities for growth, the company plans to widen its India portfolio with a key focus on hydration. "We are looking at building upon the Aquafina brand with extension in fortified nutritional water and flavoured water. Lipton tea will also continue to grow in partnership with HUL," said Sanjeev Chadha, CEO, PepsiCo India Holdings.
While declining to comment on the number of new products that would find their way into India, Nooyi said, "Quaker still hasn't been launched fully in India. Hydration products like the Gatorade offshoots will also make way into the Indian market.
In a year, typically, the company launches around 5-10 new products depending on the market dynamics." She added that the company aimed to increase the share of healthy products to 50 per cent from the present level of 30 per cent.
Terming inflation as a concern for PepsiCo globally, Nooyi said short-term margins for the company were under pressure.
While the company still imports citrus concentrate for its beverages, PepsiCo aims to increase its plantation in Punjab to make it a hub for citrus fruits. Pepsi is betting on kinnow and other citrus fruits for local consumption. It may also look at exporting the fruit concentrate in the future.
Mike White, vice-chairman, PepsiCo, said at present about 60 per cent of its international growth comes from emerging markets and India is one of the top five markets for the company.
PepsiCo's also announced a pilot project in the country to help eradicate poverty and hunger as a part of the UN Millennium Development Goals for 2015. Further the company will invest up to $ 15 million under the PepsiCo Foundation for providing safe drinking water to countries like India.