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‘Carbonated drinks to be our growth drivers going forward’

‘Carbonated drinks to be our growth drivers going forward’
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First Published: Thu, Mar 29 2007. 12 01 AM IST
Updated: Thu, Mar 29 2007. 12 01 AM IST
Sanjeev Chadha has seen the future, and it is bubbly. The new chairman of Pepsico India, the Indian arm of the global beverages and food major, said that the company’s portfolio of carbonated soft drinks (CSD) would drive growth in the near term.
“I see our carbonated soft-drinks business growing well in the future,” said Chadha, who took over the reins of the company earlier this year. “The non-carbonated drinks segment is growing the fastest, but that’s because it is growing on a very small base. Juices and other health-drink segments in India are still too small,” he added.
CSDs currently account for two-thirds of the company’s total revenues. PepsiCo is not listed in India and does not disclose its revenue here. Chadha said he hoped to “double PepsiCo India’s revenue in the next three years”.
The total size of the soft-drinks industry in India is estimated to be Rs 6,000 crore; both Coca-Cola, the other leading beverages company in the country, and PepsiCo claim their leadership in this market.
Chadha, who has spent more than 16 years with PepsiCo in different roles across Asia, said he was “cautiously optimistic” about the cola industry’s growth prospects this year. The last three years have been turbulent for both Coca-Cola and PepsiCo in India. Repeated allegations, by environmental groups, of the presence of pesticide residue in their products led to a drop in sales for both firms.
“My mandate when I took over this year was to grow the company in India along our global goal of performance with a purpose. This goal is focused on three planks, portfolio, environment and people,” said Chadha.
“Building a strong portfolio offering varied drink options to consumers, replenishing the environment and being a people-friendly company are core to our growth strategy,” explained the new chairman, who was one of the founding team of PepsiCo India in 1989.
The cola company is looking at expanding its portfolio in the next two to three years. While Chadha was not forthcoming with any details, a senior executive in the company told Mint on the condition of anonymity that PepsiCo planned to launch “new juice variants” this year under its Tropicana brand. It is also likely to bring to India “some value-added (vitamin and minerals) drinks from its global water portfolio”.
“Innovations across our portfolios is high on our agenda and we will see new product launches across the board in the next two to three years. Health drinks are more of a focus,” said Chadha.
The company, which has so far invested $700 million in its India operations, also intends to make investments in “new product launches, plant upgrades and new technology”, according to Chadha. He added that the company “had no plans in the near future” of demerging its bottling operations from the company, the way its rival Coca-Cola did recently. PepsiCo has around 40 manufacturing plants (bottling facilities) in the country and owns 50% of these.
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First Published: Thu, Mar 29 2007. 12 01 AM IST
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