Pepsico--Jan24.

qxd 1/2/2010 4:12 AM Page 2

CORPORATE—PEPSICO

Under Indra Nooyi PepsiCo

wants to become a smarter
and healthier food and
beverages company. Here’s
the story on how India is at
the vanguard of that transition.

RACHIT GOSWAMI/www.indiatodayimages.com
SHAMNI PANDE

How
India is
Changing
● In Q3, best growth for PepsiCo
worldwide came from India
● Slew of indigenous products

PepsiCo
PepsiCo’s Chadha at a Nimbooz bottling plant in Aurangabad, Maharashtra
the Aliva kind and the first from a
new baked-snack business unit formed
early in 2009.
Nooyi’s enthusiasm for Aliva has
little to do with her years growing up
in Madras (now Chennai), a city that
relishes snacks from “thattai”, a lentil-
based spicy wafer, to “poli”, a flat-
such as Aliva, Nimbooz,
Kurkure launched
● Idea and technology of
second behind Nestle SA by revenues Nimbooz used to launch a
among food and beverage makers in
Hibiscus-based drink in Egypt
the world).
For certain, the global foods ● India is a low-cost-
industry for some years now has sought high-quality benchmark for
to offer customers locally relevant tastes, other PepsiCo regions
flavours and ingredients. But seldom
have international corporations rustled ● The company has turned
its entry obligations into

N
ot even many in the they headed out for Christmas holi-
senior tiers of PepsiCo days, Indra Nooyi, Chairman and CEO,
Inc. know of a quiet PepsiCo, placed a bright-coloured pack
coup the Indian unit of tangy baked crackers on the table.
of the foods and bev- The brand, Aliva, had been
erages giant scored in December. At a developed nearly 12,000 km away
meeting of the company’s top execu- at Gurgaon and was crackling in the
tives at Purchase, New York, before Indian snacks marketplace, since a
summer launch, selling at Rs 12 a
pack. “Why can’t we do an Aliva, at a
similar price, in our other top mar-
kets,” Nooyi, 54, asked her key lieu-
tenants of the latest product in
PepsiCo’s fast-growing global foods
portfolio. India was the lead market in
the company’s sprawl for a product of
tened bread with a jaggery-based fill-
ing, to “murukku”, the salty, fried
chickpea snack. It has roots in PepsiCo
India shining the headlights for the
$43-billion business she runs as it
transforms from a sweetened, fizzy
water company to one that sells
healthier products (it is already ranked
up brands for their mature western
markets that have been brewed in a re- a strategic advantage
gional outpost lab.
The man heading the outpost,
in this instance—Sanjeev Chadha,
Chairman, India region—calls the
phenomenon “the shifting centre of
the universe”. A decade ago, he says,

42 BUSINESS TODAY January 24 2010 January 24 2010 BUSINESS TODAY 43

Pepsico--Jan24.qxd 1/2/2010 4:12 AM
CORPORATE—PEPSICO
Under Indra Nooyi PepsiCo
wants to become a smarter
and healthier food and
beverages company. Here’s
the story on how India is at
the vanguard of that transition.
SHAMNI PANDE
How
India is
Changing
PepsiCo
N
ot even many in the
senior tiers of PepsiCo
Inc. know of a quiet
coup the Indian unit
of the foods and bev-
erages giant scored in December. At a
meeting of the company’s top execu-
tives at Purchase, New York, before
42 BUSINESS TODAY January 24 2010
Page 2
they headed out for Christmas holi-
days, Indra Nooyi, Chairman and CEO,
PepsiCo, placed a bright-coloured pack
of tangy baked crackers on the table.
The brand, Aliva, had been
developed nearly 12,000 km away
at Gurgaon and was crackling in the
Indian snacks marketplace, since a
summer launch, selling at Rs 12 a
pack. “Why can’t we do an Aliva, at a
similar price, in our other top mar-
kets,” Nooyi, 54, asked her key lieu-
tenants of the latest product in
PepsiCo’s fast-growing global foods
portfolio. India was the lead market in
the company’s sprawl for a product of
PepsiCo’s Chadha at a Nimbooz bottling plant in Aurangabad, Maharashtra
the Aliva kind and the first from a
new baked-snack business unit formed
early in 2009.
Nooyi’s enthusiasm for Aliva has
little to do with her years growing up
in Madras (now Chennai), a city that
relishes snacks from “thattai”, a lentil-
based spicy wafer, to “poli”, a flat-
tened bread with a jaggery-based fill-
ing, to “murukku”, the salty, fried
chickpea snack. It has roots in PepsiCo
India shining the headlights for the
$43-billion business she runs as it
transforms from a sweetened, fizzy
water company to one that sells
healthier products (it is already ranked
RACHIT GOSWAMI/www.indiatodayimages.com
● In Q3, best growth for PepsiCo
worldwide came from India
● Slew of indigenous products
such as Aliva, Nimbooz,
Kurkure launched
● Idea and technology of
second behind Nestle SA by revenues Nimbooz used to launch a
among food and beverage makers in
Hibiscus-based drink in Egypt
the world).
For certain, the global foods ● India is a low-cost-
industry for some years now has sought high-quality benchmark for
to offer customers locally relevant tastes, other PepsiCo regions
flavours and ingredients. But seldom
have international corporations rustled ● The company has turned
its entry obligations into
up brands for their mature western
markets that have been brewed in a re- a strategic advantage
gional outpost lab.
The man heading the outpost,
in this instance—Sanjeev Chadha,
Chairman, India region—calls the
phenomenon “the shifting centre of
the universe”. A decade ago, he says,
January 24 2010 BUSINESS TODAY 43
Pepsico--Jan24.qxd 1/2/2010 4:12 AM Page 4
CORPORATE—PEPSICO
“There has been interest in the Pepsi eco-system for local
variants of Kurkure from South Africa to the UK”
GAUTHAM MUKKAVILLI, CEO—India Foods & President—India Region, PepsiCo India
using rice, corn and lentil flour.
Kurkure has gone on to become a
blockbuster success with sales (it is a
Rs 700-crore brand in India) rap-
idly tick-tocking to as far as West
Asia. “There has been interest in
the Pepsi eco-system for local vari-
ants of Kurkure from South Africa to
the United Kingdom,” says Gautham
Mukkavilli, CEO—India Foods and
President—India region for PepsiCo.
He expects that Quaker Oats (worth
Rs 70 crore annual sales), intro-
duced in end-2005, and Aliva, will
be as big as Lays (the Pepsi flagship
chips brand rakes in Rs 900 crore)
and Kurkure eventually.
Nimbooz, a packaged lemonade
that uses no artificial flavours and
fizz, launched in March 2009 is
another hit from India. “We have
already used the idea and technol-
ogy of the product from India to
launch Mirinda Karkedeh in Egypt
which is a hibiscus-based drink,” says
Saad Abdul Latif, CEO of PepsiCo for the
Asia, Middle East and Africa regions,
adding that some of the other markets
under his ward are, too, looking to
introduce Nimbooz variants.
Several other options are in the
pipeline, which PepsiCo will not talk
SHEKHAR GHOSH
about for competitive reasons, prompt-
ing Nooyi to call her India offices “our
biggest learning lab” (see interview on
page 50). The obvious options are new
flavours and pricing options for Lays,
Kurkure and Aliva; already, Kurkure is
companies leveraged global mar- successful products from India, a available at Rs 2 for a 13-gm pack.
kets with existing brands and solu- subsidiary halfway around the world “We have pilot-tested Kurkure as a
tions; today they are turning to tech- for PepsiCo. In 2000, PepsiCo India, chaat at some malls. The idea was to get
nologies, processes and even prod- as the Gurgaon-headquartered chefs to offer a chaat that used our
ucts across the spectrum from vari- Indian unit is called, developed brand,” says Deepika Warrier,
ous markets. “The flip is not Kurkure (the brand comes from the Marketing Director (for Foods), PepsiCo
difficult to foresee,” he concludes. Hindi word for crunchy) from India of the plate of savoury snacks
That inference lies in the series of scratch to offer Indians a finger-food often doused in curd and sweet syrup.
44 BUSINESS TODAY January 24 2010
T.S.R Murali, Executive Director—
Technology, PepsiCo India, or “Doc” as
he is called in-house, embodies the
ways new tastes are developed at the
company’s Gurgaon labs. For the
latest flavour, “Lime and Masala Masti”
of Lays, for instance, he looked at the
ways consumers have potatoes at
home. "The challenge is to offer a com-
bination of popular familiar taste in
an innovative, healthy manner,” he
says of his team’s job.
PepsiCo India’s production lines,
too, have tweaks that go beyond just
saving costs. The company, for in-
stance, retooled a line based on the
Reading Bakery System, a popular
biscuit baking machinery brand, by
adding a seasoning tumbler on the
salty snack line. Result: flexibility in
adding any flavour on any baked
base. “Typically, manufacturers tend
to add the flavours and seasoning
with the dough, but ours seeks to add
this to the product” in its final stages,
says Mukkavilli. The learning came
from the chips-making line where the
flavour is the last stage of the process.
In beverages, PepsiCo India is
“experimenting with ginger and mint
as an ingredient” as also looking at
sachets and dry concentrates as a
delivery option that customers can
use to make a drink, according to
Geetu Verma, Executive Director—
Innovations—PepsiCo India.
Erin Ashley Smith, a senior an-
alyst tracking the consumer sector at
Argus Research, US, thinks the strat-
egy of distributed development
makes sense. “I think there is op-
portunity to take products from in-
ternational markets and expand
them into the US or other markets,”
she said in an e-mail interview.
Indeed, the tipping point might be
right for Nooyi, a CEO unafraid of tack-
ling change (she was the force at
PepsiCo behind the $13.4 billion
Quaker Oats buyout late in 2000), as
she gets the multinational to taste an as-
yet tantalising concept: “disruptive in-
novations” trickling up from her
smaller, regional posts to more ma-
ture markets. As more and more con-
sumers turn to tap water,
impacting soda sales in the slowdown-
plagued West, there is compelling logic
in competitively-priced products such
as Aliva to drive growth. “Just think
about it…this would translate into
roughly 25 cents...,” says Chadha,
PepsiCo’s India Chairman. He should
know: some 37 per cent of PepsiCo
India’s Rs 5,200 crore revenues (year
to date until September 30, according
to estimates) come from snacks and
foods such as Kurkure and Aliva—a
contribution second only to PepsiCo’s
Walkers Snack Foods unit in the UK
(outside of US). That chunky contribu-
tion has already likely helped PepsiCo
India overtake Nestle India as No. 1
among Indian branded and processed
foods and beverages companies (the
foods portfolio of Hindustan Unilever
and ITC lag behind). The verdict is not
out on this but a Mumbai FMCG analyst
reckons the only player, if any, ahead of
PepsiCo is United Spirits.
In allowing regions such a free
will to create, acquire and launch
new brands, Nooyi is seeking to side-
step a common problem that larger
companies often tend to have—their
inability to take risks. “My biggest
learning on foods has been from my
biggest mistake,” says Warrier, the
marketing head, referring to a failed
experiment of melding Lays chips with
non-vegetarian flavours such as tan-
doori chicken in 1999.
Hungry for Less
For all other successes with locally-
developed food products, PepsiCo India
has the government here to thank—at
least, partly—for being the envy of its
peers. A condition that New Delhi set
for the entry of the multinational into
India in 1989 was that Pepsi (the
name changed to PepsiCo in 2000)
would operate through a joint ven-
ture with the Punjab government and
export goods worth half its turnover for
10 years. For the company, then, ex-
ports came through farm produce. As
a result, today, its strength in cultiva-
tion of potatoes and paddy is proving to
be the lynchpin for its unique solu-
tions from India that, in turn, are prov-
January 24 2010 BUSINESS TODAY 45
Pepsico--Jan24.qxd 1/2/2010 4:12 AM Page 4
CORPORATE—PEPSICO
“There has been interest in the Pepsi eco-system for local
variants of Kurkure from South Africa to the UK”
GAUTHAM MUKKAVILLI, CEO—India Foods & President—India Region, PepsiCo India
using rice, corn and lentil flour.
Kurkure has gone on to become a
blockbuster success with sales (it is a
Rs 700-crore brand in India) rap-
idly tick-tocking to as far as West
Asia. “There has been interest in
the Pepsi eco-system for local vari-
ants of Kurkure from South Africa to
the United Kingdom,” says Gautham
Mukkavilli, CEO—India Foods and
President—India region for PepsiCo.
He expects that Quaker Oats (worth
Rs 70 crore annual sales), intro-
duced in end-2005, and Aliva, will
be as big as Lays (the Pepsi flagship
chips brand rakes in Rs 900 crore)
and Kurkure eventually.
Nimbooz, a packaged lemonade
that uses no artificial flavours and
fizz, launched in March 2009 is
another hit from India. “We have
already used the idea and technol-
ogy of the product from India to
launch Mirinda Karkedeh in Egypt
which is a hibiscus-based drink,” says
Saad Abdul Latif, CEO of PepsiCo for the
Asia, Middle East and Africa regions,
adding that some of the other markets
under his ward are, too, looking to
introduce Nimbooz variants.
Several other options are in the
pipeline, which PepsiCo will not talk
SHEKHAR GHOSH
about for competitive reasons, prompt-
ing Nooyi to call her India offices “our
biggest learning lab” (see interview on
page 50). The obvious options are new
flavours and pricing options for Lays,
Kurkure and Aliva; already, Kurkure is
companies leveraged global mar- successful products from India, a available at Rs 2 for a 13-gm pack.
kets with existing brands and solu- subsidiary halfway around the world “We have pilot-tested Kurkure as a
tions; today they are turning to tech- for PepsiCo. In 2000, PepsiCo India, chaat at some malls. The idea was to get
nologies, processes and even prod- as the Gurgaon-headquartered chefs to offer a chaat that used our
ucts across the spectrum from vari- Indian unit is called, developed brand,” says Deepika Warrier,
ous markets. “The flip is not Kurkure (the brand comes from the Marketing Director (for Foods), PepsiCo
difficult to foresee,” he concludes. Hindi word for crunchy) from India of the plate of savoury snacks
That inference lies in the series of scratch to offer Indians a finger-food often doused in curd and sweet syrup.
44 BUSINESS TODAY January 24 2010
T.S.R Murali, Executive Director—
Technology, PepsiCo India, or “Doc” as
he is called in-house, embodies the
ways new tastes are developed at the
company’s Gurgaon labs. For the
latest flavour, “Lime and Masala Masti”
of Lays, for instance, he looked at the
ways consumers have potatoes at
home. "The challenge is to offer a com-
bination of popular familiar taste in
an innovative, healthy manner,” he
says of his team’s job.
PepsiCo India’s production lines,
too, have tweaks that go beyond just
saving costs. The company, for in-
stance, retooled a line based on the
Reading Bakery System, a popular
biscuit baking machinery brand, by
adding a seasoning tumbler on the
salty snack line. Result: flexibility in
adding any flavour on any baked
base. “Typically, manufacturers tend
to add the flavours and seasoning
with the dough, but ours seeks to add
this to the product” in its final stages,
says Mukkavilli. The learning came
from the chips-making line where the
flavour is the last stage of the process.
In beverages, PepsiCo India is
“experimenting with ginger and mint
as an ingredient” as also looking at
sachets and dry concentrates as a
delivery option that customers can
use to make a drink, according to
Geetu Verma, Executive Director—
Innovations—PepsiCo India.
Erin Ashley Smith, a senior an-
alyst tracking the consumer sector at
Argus Research, US, thinks the strat-
egy of distributed development
makes sense. “I think there is op-
portunity to take products from in-
ternational markets and expand
them into the US or other markets,”
she said in an e-mail interview.
Indeed, the tipping point might be
right for Nooyi, a CEO unafraid of tack-
ling change (she was the force at
PepsiCo behind the $13.4 billion
Quaker Oats buyout late in 2000), as
she gets the multinational to taste an as-
yet tantalising concept: “disruptive in-
novations” trickling up from her
smaller, regional posts to more ma-
ture markets. As more and more con-
sumers turn to tap water,
impacting soda sales in the slowdown-
plagued West, there is compelling logic
in competitively-priced products such
as Aliva to drive growth. “Just think
about it…this would translate into
roughly 25 cents...,” says Chadha,
PepsiCo’s India Chairman. He should
know: some 37 per cent of PepsiCo
India’s Rs 5,200 crore revenues (year
to date until September 30, according
to estimates) come from snacks and
foods such as Kurkure and Aliva—a
contribution second only to PepsiCo’s
Walkers Snack Foods unit in the UK
(outside of US). That chunky contribu-
tion has already likely helped PepsiCo
India overtake Nestle India as No. 1
among Indian branded and processed
foods and beverages companies (the
foods portfolio of Hindustan Unilever
and ITC lag behind). The verdict is not
out on this but a Mumbai FMCG analyst
reckons the only player, if any, ahead of
PepsiCo is United Spirits.
In allowing regions such a free
will to create, acquire and launch
new brands, Nooyi is seeking to side-
step a common problem that larger
companies often tend to have—their
inability to take risks. “My biggest
learning on foods has been from my
biggest mistake,” says Warrier, the
marketing head, referring to a failed
experiment of melding Lays chips with
non-vegetarian flavours such as tan-
doori chicken in 1999.
Hungry for Less
For all other successes with locally-
developed food products, PepsiCo India
has the government here to thank—at
least, partly—for being the envy of its
peers. A condition that New Delhi set
for the entry of the multinational into
India in 1989 was that Pepsi (the
name changed to PepsiCo in 2000)
would operate through a joint ven-
ture with the Punjab government and
export goods worth half its turnover for
10 years. For the company, then, ex-
ports came through farm produce. As
a result, today, its strength in cultiva-
tion of potatoes and paddy is proving to
be the lynchpin for its unique solu-
tions from India that, in turn, are prov-
January 24 2010 BUSINESS TODAY 45
Pepsico--Jan24.qxd 1/2/2010 4:12 AM Page 6
CORPORATE—PEPSICO
ing to be potential game changers glob-
ally. For instance, PepsiCo India is the coun-
try’s largest corporate involved in potato
contract farming and deals with 1,50,000
tonnes of the tuber worth about Rs 200
crore annually. After a series of successful
initiatives around tomatoes, chillies, peanuts
and rice, the company is now looking at oats
cultivation possibilities in India—an effort
that in the days ahead will feed its Quaker
Oats portfolio.
That self-reliance grew into Pepsi India’s
DNA in the years since 1989 even though
growth has been more driven by bever-
ages in a market underpenetrated by fizzy
water. The Indian unit has helped develop
technologies that enable what is called direct
seeding of rice, which eliminates holding wa-
ter for paddy cultivation, thereby saving
30 per cent of water used in rice farming.
That effort, under a social responsibility
initiative, would have covered about 6,000
acres of rice farms in 2009 and saved an
estimated five billion kilolitres of water (see
No Paddy Pool, Dec. 13 issue).
Nearly two-fifths of energy used at its
various PepsiCo India plants comes from re-
newable sources—typically, bio-mass and
wind turbines. It has set up a wind-mill
in Tamil Nadu and plans two more for
generating captive power for internal use.
“These are breakthroughs and nowhere
else has the organisation managed to turn
water positive, the way it has done in
India,” says Chadha, who counts 2009
as the best year for PepsiCo’s mainstay
beverages business that expanded 40 per
cent in volumes in the September 2009
quarter from the previous year.
The thrift extends into foods as well.
Today, PepsiCo India sets up potato chips
capacity at about 80 per cent cost com-
pared to that of western countries at the
same levels of quality. Throughput of pro-
duction lines has been enhanced by up to
one-fifth at marginal investments through
suggestions that came up from shopfloor
workers. A snacks plant at Sankrail near
Kolkata has turned to rice husk as feed-
stock for its energy needs reducing its
dependence on petroleum by 75 per cent.
The Indian consumer goods model of
dependence on external distributors—bipo-
46 BUSINESS TODAY January 24 2010
PepsiCo’s India Talent Factory
A
one-in-a-million incidence of a genius can be misleading
in a population the size of India and China, the joke
goes. For, the two Asian giants will have a thousand
geniuses each even by that thrifty measure. Still, the number
of Indians rotated through the Indian offices of PepsiCo to the
rest of the enterprise and other companies is spectacular.
Ramesh Vangal, the first CEO of Pepsi, as the company
was called until early 2000, thinks the company's edge in
India has clearly been its people. “As companies grow big,
they become brittle and cannot handle change; but
PepsiCo retains its agility because it has always recruited
the best," he says.
His focus on recruitment in
● INTERNALLY HIRED the mid- to late-’80s was to
Prem Kumar, CEO, China Foods hire the best by paying the best,
Mannu Bhatia, Director, US even if it meant changing the
Varun Berry, Country Manager, compensation structure in the
the Philippines country. "PepsiCo India, in fact,
Achal Agarwal, COO, has been a significant provider
China Beverages of talent to not just its other
offices worldwide, but also to
the corporate world (at large),"
● HEAD-HUNTED OUT says Rajeev Vasudeva, Partner,
Param Uberoi CEO, Pernod Egon Zehnder International.
Ricard, South Asia Examples: Former Head of
Sanjay Nandrajog, CEO, Frito Lays in India, Manu
Farm Fresh, Bharti Anand, has gone on to head
Harit Nagpal, Commercial the business in Thailand and
Capability Director, Vodafone, Vietnam. George Kavoor, who
Europe used to head traditional trade
Lloyd Mathais, Chief Marketing operations in India, has
become the Sales Director in
Officer, Tata Teleservices
China. Chitra Talwar has gone
as Vice President, Sales
Operations to PepsiCo Inc. and Vipul Prakash as Director
(flavours) to the US parent.
The more visible splash has been in the way ex-PepsiCo
high-fliers have badged themselves as movers and shakers of
corporate India. Muktesh Pant, who headed food processing
operations at Pepsi India in 1992, was hired by Reebok
International as its global Marketing Head and is now the
global Marketing Head at Yum! Restaurants International,
the owner of Pizza Hut and KFC chains. Asim Ghosh, who
retired in March 2009, as Managing Director of Vodafone
Essar had moved to India as the Co-managing Director of
Pepsi Foods in 1989 from Rothmans International. See the
list above for more names.
So, what makes PepsiCo India the prime hunting ground
for managers? Role-playing opportunities that help its
people handle a cross-section of functions, says Ashutosh
Khanna, Partner at head-hunting firm Korn/Ferry
International.
SHAMNI PANDE
Pepsico--Jan24.qxd 1/2/2010 4:12 AM
CORPORATE—PEPSICO
lar compared to the traditional bottler
model that cola companies earlier swore
by—too held out lessons for PepsiCo in
other parts as well. “India has con-
stantly provided solutions. When we
started, we emulated Hindustan Lever’s
(now called Hindustan Unilever) dis-
tribution model involving the third
party. This was something new to the
organisation and was subsequently
introduced in other Asian markets,”
says P.M. Sinha, the second head at
Pepsi India. Mukkavilli, the foods head
at PepsiCo India today, for instance,
credits his early years in India for suc-
“We benchmark against India’s P&L. It has among the best
cost efficiencies and many innovative solutions”
SAAD ABDUL LATIF, CEO of PepsiCo for the Asia, Middle East and Africa regions
cessfully implementing a third-party
distribution structure in Vietnam when
he moved there in 1998.
Elsewhere in the PepsiCo empire,
every little act of enterprise at the
Indian unit is being carefully noted
and recorded for future application:
“We tend to normalise costs and
benchmark them against India’s P&L
(profit and loss account). It has among
the best cost efficiencies and there are
many innovative solutions at every
step of the manufacturing process to
improve productivity and efficiency,”
says Latif, to whom Chadha and the
India team report to. An information
technology sales platform developed at
PepsiCo India has been adopted in the
parent’s other Asian markets.
Eat Healthy, Eat Merry
PepsiCo’s global board of directors
meeting was recently held in India,
which is testimony to the scorching
pace the market has registered. The
idea was to apprise the board mem-
bers—including Colgate Palmolive
Chairman and CEO Ian Cook; Daniel
Vasella, Chairman and CEO of Novartis
AG; and Zurich Financial Services’ CEO
James Schiro—of the rash of growth in
market innovations that were stem-
48 BUSINESS TODAY January 24 2010
Page 7
ming from this region and, perhaps,
also setting the stage to the idea of
sourcing brands from such markets.
PepsiCo’s increasing thrust on its
India unit coincides with the parent’s
shift to healthier products tracking
changing consumer choices and its
losing cola battle globally to its arch-ri-
val Coca-Cola. All through the last 15
years, PepsiCo, led by former CEOs Roger
Enrico and Steve Reinemund (Nooyi
took over in October 2006) was quick
to build on the insight that consumers
were opting for non-carbonated bev-
erages. It established Aquafina and
Gatorade that came along with the
Quaker Oats acquistion in water and
sports drinks as global leaders.
In that sense, the footwork and
body language have been consistent.
PepsiCo has made no bones about its
intention to keep diving deeper into
nutritious and healthier choices, even
by snapping up disparate businesses
across different parts of the world: a
joint venture with Almarai, the Gulf’s
largest dairy company to invest in
dairy and juice processors, in 2009,
followed by an agreement to buy out
Amacoco in Brazil, the largest co-
conut water company. That inten-
tion is not swept under the carpet in
VIVAN MEHRA
India either. “We are open to mergers
and acquisitions; but do not depend on
this for our growth. Our portfolio and
new launches offer us enormous
opportunities,” says Chadha.
To be sure, India is among markets
where the growth in carbonated
drinks is rocketing. In fact, the growth
story in beverages is that the com-
pany, despite trailing Coca-Cola in
overall market shares, has actually
outgrown the rival in volume per-
centage terms in each of the last three
quarters—narrowing the gap between
their beverage revenues (Coca Cola
India’s revenues was some Rs 4,000
crore in 2008.)
“The fact is that India trails even
Pakistan in per capita consumption of
packaged beverages; hence there is a
huge headroom for growth in the
business,” says Mukkavilli. Together
with ambitions of moving its busi-
ness more towards the “centre of the
plate”, that opportunity in its main
business could well see PepsiCo top Rs
40,000 crore revenues in India by
2020, its 10-year aim. But, if all play
by Nooyi’s script for the Indian unit on
the global stage, that will be the epi-
logue to the PepsiCo India story of
the tail wagging the dog.

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