PepsiCo expects to shortly increase its annual sales in India to over $1 billion from around $700 million at present. The Indian business is the company's fifth largest outside the US now.
“We are on track to make it the second or third largest," PepsiCo chairman & CEO Steve Reinemund, said at a media briefing in New Delhi on Monday.
However, Reinemund, who is on his maiden four-day visit to India, was not willing to give a time-frame for this. When reporters persisted, PepsiCo India chief Rajeev Bakshi came to his help. “Let's not force the pace beyond a point,” Bakshi said.
But Reinemund, who keeps himself trim by running marathons, surely knows how to fatten a bottom line. PepsiCo, which has invested $700 million in India (over $1 billion in China) since 1989, has seen a steady double-digit growth in its volumes.
The company is making operating profits in India and its exports are worth over $60 million, up from just $3 million in 1991. The snacks business in India, in fact, has been the fastest growing segment for five consecutive years.
"India is clearly one of our priority markets," Reinemund says, and gives his top "two leaders in the country"-- Rajeev Bakshi and Manu Anand, managing director of Frito-Lay--a huge pat on the back.
Referring to the Rs 5 pricing strategy adopted by the cola makers, Reinemund says it helped the company increase its consumer base in the country from 150 million to 250 million. "The critical mass has been reached. It is time now to increase the depth of consumption," he says.
Reinemund, an ex-Marine who took over as Pepsico chairman in May 2001, says he is also a great fan of Indian leadership qualities.
"We have already exported 40 leaders from our Indian operations to countries around the world. Though Bakshi and Anand will not like it, let me take the liberty of telling you that we are planning a significant increase in our manpower exports from India," he says.
PepsiCo, he says, employs more than 4,000 people in India directly and over 60,000 indirectly. The company pioneered the concept of contract farming in India and has relationships with over 2,000 farmers. Apart from six high-yield potato varieties, the development of new seeds has helped increase the total annual production of tomatoes from 28,000 tonnes to over 250,000 tonnes in Punjab.
The CEO of the $27 billion PepsiCo, the fourth largest foods and beverage company in the world, met Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia later in the day, but did not "for once" talk about the 8 per cent special excise duty on carbonated soft drinks, which has been hitting the industry's affordability strategy for some time now.
"I only wanted to talk to them about how good a corporate citizen PepsiCo India has been. My only mission this time is to listen to the fantastic marketplace of India and to talk to our Indian employees," he says.