In The News
08 Apr 2014

Innovation is required to beat inflation: PepsiCo India CEO

PepsiCo India is taking quite a pounding lately — from losing market share to arch rival Coca-Cola India month-on-month to get a raw deal in the 7th edition of the Indian Premier League (IPL matches to be played in three countries). Add to it the delayed summer, which is not making it easier for the New York-based food and beverage giant. D Shivakumar, chairman and CEO, PepsiCo India, has his immediate task cut out — put the house in order and regain PepsiCo's market share in the beverage segment. John Sarkarcaught up with him for a frank conversation. Excerpts :

There were couple of organizational restructuring announcements since you have taken over and it seems the PO1 strategy is finally taking shape. Do you think this is important to accelerate the growth process for the India business?

From a consumer point of view, PO1 makes sense since consumers tend to buy beverages and snacks together more than 50% of the time. We had two distinct organizations that specialized in snacks and beverages individually. Now both are aligned. We moved from being a business unit organization to a functional organization. A functional unit offers more depth, but it needs higher collaboration among employees. Most people in PepsiCo are happy with the changes and seem to have settled down.

What is your short-term and long-term strategy for PepsiCo?

We have a wonderful range of brands. The key is to sharpen them and make them far more appealing to consumers. For instance, we have created three variants of Slice with mangoes from different regions of the country and we will be launching the new range soon. The second thing that counts is innovation. I believe innovation is required in markets like India not only for growth, but also to beat inflation. Innovation gives you the ability to do that by having better-margin products, bettertargeted products...otherwise one wouldn't have a chance.

Why is PepsiCo losing its edge in advertising?

There's a never a point in time when you can say that this 'is the ad' and that's 'the end of it'. You evolve. Our intent always is to connect significantly better with the youth. Pepsi has always been youthful, it's a youth brand and we will always strive to be that.

The beverages division of has been witnessing a decline in its market share month-on-month, what according to you is the reason and how are you going to stem that decline?

I wouldn't be able to comment on market share and certainly not at this time when we are in the silent period.
Source: TOI