Mumbai: Even though the growth rate of the consumer packaged business has slowed, India remains a priority market for PepsiCo Inc., according to Manu Anand, chairman of PepsiCo India. In an interview on the sidelines of the Retail Leadership Forum 2013 on Thursday, Anand discussed the areas of growth and challenges while acknowledging that inflation is the biggest challenge. Edited excerpts:
According to industry reports. there is a slowdown in the food business. How has this affected your growth?
Our products are really small indulgences and start from price points of Rs.2 to Rs.60. So they are not big ticket items, but indulgences that consumers continue to consume. There are a few quarters of ups and downs. It’s also probably the fact that the Indian economy is not as buoyant as earlier, but Pepsico continues to be bullish about the Indian economy, outlook and consumers. We are seeing that in categories like biscuits and tea, the rate of growth has slowed as compared with the previous years. But India remains a growth market.
Is the growth coming from new niche categories that are growing on a smaller base, while the large categories are slowing?
Our entire portfolio is continuing to grow very well. Our carbonated beverages, our juice, Aquafina, all continue to grow at very healthy rates. Similarly, on the snacks side, our potato chips, Kurkure as well as some of our baked variants are all growing.
Indian consumers, it is said, prefer to spend on indulgence and taste rather than buying healthy food. What is your experience?
First, our strategy has always been to give consumers choices, hence products like Tropicana, Aquafina, Aliva and baked Lays. These products are growing at healthy rates, but, yes the fact is that the base is still very small.
What are the growth drivers?
All segments provide growth opportunities. Rural continues to be an exciting opportunity and is growing at an healthy rate.
Is the rural portfolio different from metros?
We do have core products and are even developing products like Tata Gluco Plus (glucose-based flavoured drink) along with Tata Global Beverages Ltd. These products are being well received and we plan to roll them out nationally soon.
When you initially launched Aliva, the product was not doing well...
We continue to innovate in that space. Getting the right mix of health and taste is going to be the winning products. So our new variant Aliva Multi-grains has got a good response.
What trends do you see in the consumer space in 2013?
The consumer is still trying new products, looking for new experiences and clearly enjoys and continues to consume our products, which are small indulgences in the food and beverage space. It’s also a trend for more healthier diets and more balanced products such as Quaker and Tropicana that are picking up really really well.
What are the challenges this year?
The biggest challenge that we face is inflation. Inflation is not just cost increase. We really focus on dealing with it by upping our productivity agenda and making sure we minimize pricing impacts to the consumer.