We’re the only ones in the industry to have actually made the move to rice bran oil from palmolein, though it’s slightly more expensive, it’s reflective of our commitment to make the portfolio transformation and we communicated it on the platform of Snack Smart. With Cheetos Whoosh, we did a combination of things, not only rice bran, but the oil slurry in which snacks were put through for the outer seasoning coating was reduced, so there’s less fat; it’s also made of half a serving of whole grain and half a serving of vegetables.
If you put all of these in a continuum, you’ll see we’ve relentlessly kept up the momentum even as we’ve grown our core business. We’ve been category leaders. For the last 10 years, Frito Lays has been the fastest growing packaged consumer goods business in the country and has done that by doing new things – we created a potato chip business, an agro footprint, launched Indian flavours, brought in local relevance through launch of Kurkure. Our core is growing nicely but it’s time to draw the next curve of growth.
Aliva is trying to bridge two very big and fast growing categories — salty snacks and biscuits. We want to be just like Kurkure was in the sweet spot between sweet and salty. It’s also a baked snack, so it’s part of the continuum. We would rather create a category versus referencing ourselves to one or the other.
The foods and beverages business has been integrated now — so how much do foods contribute to revenues? Have you been able to leverage that? What percentage of Pepsi India’s revenues come from the non-CSD categories? Also, you don’t seem to have leveraged the great Pepsi marketing machine for Tropicana? What’s the status with the joint venture with HUL for Lipton?
Chadha: Foods contribute 33-35 per cent of the business. Beverages the rest. Non-CSDs contribute as much as a third of the revenue from the beverages. As for Tropicana and Lipton, Tropicana is the fastest growing juice in the country today, and is the market leader among the 100 per cent, good-for-you juices. The overall focus is category by category, so we don’t want to go too wide too quick. We won’t be really leveraging the opportunity there. There’s massive momentum now on Tropicana 100 per cent juice. Last year we got an endorsement by the Indian Medical Association. We are trying to work with the doctor community; you wouldn’t have thought about Pepsico doing this, but we have medical detailing.
There’s not much presence of the Lipton HUL venture?
We’ve chosen not to ramp up that. It an on-premise brand. We are going to evaluate based on other brands vis-À-vis portfolio expansion as to what’s the right time to get into iced tea as well.
Consumers haven’t taken to that category?
There’s a lot of latent potential — the key is how to unlock. The Indian consumer’s perception of tea has been hot tea and that is one barrier and it certainly can be addressed but then it’s not working again. We’re working on that but there are so many opportunities in the marketplace and we first want to maximise the potential of our current portfolio which is very comprehensive and very powerful.
When Pepsi entered India there were some conditions in exports — that is how you started work on tomatoes and later potatoes and oranges — where does all this stand now? Are you still working with Punjab farmers on this?
Chadha: We have a very powerful agri-outreach programme, one of the largest in the country right now, with as many as 22,000 farmers. It’s driven by our snacks business but there are partnerships on other fronts. Snacks drive potato and other crops. With focus on juices, we want an indigenous supply chain for fruit.
As part of our initiative with the Punjab government, we have opened the largest outdoor nursery at Jhalawar with 5,000 different plants and 32 varieties of citrus from Brazil, Florida.
