“Regional Flavours Are Extremely Important”
Excerpts:
What were your first impressions of India? Were you here before?
I arrived in India in November last year and took over the charge from January. Before, I have been here on two work-related trips. Everything here is big and large. But being big and large, there is also a growth story here. For me, it is a very exciting time to come and work in one of the fastest growing economies in the world. Culturally, there are a number of similarity between India and from where I come. But the number one competitive advantage that India has is the education that it is providing to the people. Today, India is a great phenomenon.
Do you find any difference between Indian consumers and the rest?
This country is a continent. Regional flavours here are extremely important. This is the major difference between consumers here and elsewhere. India is a large market so the challenge for us is to create penetration. To make the products available at affordable prices. In terms of per capita consumption, India is much lower than so many other markets. In order to increase the per capita consumption, we have to increase penetration.
How has PepsiCo India been changing with time?
Take the Tropicana drink as an example. Today, we have access to hundreds and thousands of coolers. This was not the case before. Earlier, it was sold in premium channels and in the modern trade. So there is a definite increase in the penetration of our products. As part of our NourishCo business (the JV with Tata), today we have products priced as low as Rs 10 and Rs 20. Take the example of Tata GlucoPlus which is available at Rs 10. This creates higher distribution. This is growing significantly and has huge potential. These are just one or two examples to show where we are today.
You have been quoted as saying that PepsiCo India can double its business in the next 7-8 years. Which means a continuous annual growth rate of 12.5 per cent. Whereas in the last few years, the growth has been in lower single digit? What will change over the next 7-8 years or even 10 years for PepsiCo India?
See, I am coming fresh and I am looking forward. Whatever has happened has happened. I do not want to look back. I feel we are in a great position to be the engine of growth in Asia and Middle East, Africa. We have great products, great talent and the funding to do so. Therefore, double-digit growth is possible. In this year Q1, we clocked double digit growth. For 2017, the Q4 growth was in high single digit. I am not promising that every quarter will be a high double-digit growth. But we are on track. There are 700-800 million consumer here which everybody is after. Making available great products at affordable price points is our challenge. Take water for example, we have Himalaya at the top and also a Rs 2 product. So one has to segment the market and then target where we will play and where we won’t. Things can happen.
In the cola category, can we expect some sort of price-war once again?
Here it is a packaging game. Mini can, 150 ml giving 65 calorie per consumption is a great proposition (pointing to a Mountain Dew mini-can). We have carbonated slice at Rs 10-12. Within CSD, we can address different proposition with different products. So right product and right pricing is the key. We want to have profitable growth which is responsible and sustainable. It is a priority for us. Are we committed to reduce fat, sodium and sugar in our products? Is it sustainable? The answer is yes. In juice and snacks we are playing at certain categories. We are experts in potato, we will play in that as of now. We are making fine choices and deciding which category to play in and which not.
How have the contribution from the cola category declined compared to other beverages?
The Carbonated Soft Drinks (CSD) category is growing but not as fast as the other category. And that is the truth. Even if the CSD category grows at 5-6 per cent, it is a good growth for a large scale business with big base. And as other category outgrow CSD, the contribution of CSD will go down, which is a normal phenomenon globally. As long as consumers are buying PepsiCo products, which they are, the shuffle within a category does not worry us. Overall, each aspect of our India business is growing and has bigger potential to grow at even faster pace.
Are you staying away from dairy/dairy-based categories even as your competitors and rival are looking to launch products?
As of today, I cannot say anything. We are assessing the first step we made with our innovative Oats-plus-Milk beverage launched last year. We are happy about the results and whenever we want we can scale it up. There are great things coming soon, believe me. Across categories, there are enough innovations and testing happening. It is a matter of time and you will see more products from us.
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