MARKETING: MANU ANAND ( INTERVIEW of erstwhile Chairman and CEO of PepsiCo India)

The foods and beverages giant is spending big bucks on its investment in India but hopes to earn many times over by launching interesting products and best value offerings to the Indian consumer.

Manu Anand, Chairman and CEO of PepsiCo India joined the FMCG major as CFO of Pepsi Foods in 1994. Over the years he has worked his way up the company ladders with stellar deliverables and is often credited with the success of PepsiCo’s food business in India. It was during his leadership as CEO of Pepsi Foods that Kurkure, the largest salty snacks brand in the country, and Frito Lay, were launched. In this interview with Onkar Pandey, he shares his views on what all PepsiCo is doing to scale up its business in India and taking it to the next level of growth.

How has been business so far considering that the past summer was mild by Indian standards, which may have proved disappointing for beverage sellers?
We are very happy with the growth of both our food and beverage business. It’s progressing well. Our entire portfolio is doing quite well, and not any one particular product or two. Of course, you have weather fluctuations and at business goes somewhat up or down according to such variations. But overall I think we are very happy with the progress.

India has emerged as one of your most important markets. How do you see your business growing here?
Our aim is to continue to grow fast and become the preferred choice of consumers as a foods and beverage company. Our focus is to continue providing a range of choices and outstanding products to our consumers. At the same time, we continue to focus on performance with purpose and act as a responsible corporate citizen. To this end we are working with our partners, with farmers, working on conservation projects like water preservation, et al. So, it’s an all-around objective that we are working on as a company.

For the past several months, the cost of commodities and rising inflation have squeezed business margins and added to operating costs. What has been the effect of these headwinds on your business?
Clearly, like everyone else we are facing the pressure. Inflation is hurting us like it’s hurting other sectors and industries. Our effort is to make sure we maximize productivity and minimise the impact of passing on the effect of rising costs to consumers. So we are trying to see what all we can take out on non-value-added costs to consumers in every area of the supply chain to be able to minimise the price impact. It’s an ongoing exercise with a multi-pronged strategy. Having said that, we have had to go for price increases from time to time across various pack size products, depending on which has been the most impacted. The maximum impact has been on the packaging related costs, but equally pinching have been the agri commodity prices of juice, potatoes and edible oils.

Any new areas that you plan to enter to further expand your footprint in the Indian market?
We want to be an integrated food and beverage company. So we will continue to enter new product categories. I can’t share the exact details, but you will be seeing interesting product launches from us in the next few months. Also, we will continue to invest in our bottling infrastructure and expand our capacity in agri processing like our potato chips business. PepsiCo is committed to India, we are investing heavily in the country, we have great faith in the Indian economy and in the Indian consumer. If you see we have already invested well over a billion dollars so far.

The competition is increasing in the Indian FMCG space — juice as a category now has many players. In foods ITC and regional brands are giving you a tough fight. How are you facing up to these challenges?
Competition is a fact of life, which you have to deal with by making sure that you give the best value offering and the best products to your consumers. The best part about it is that it grows the industry, and it’s good for the consumer. And as brand owners we have to ensure that we are continuously evolving and offering superior products, which offer the best relative value for money to consumers, in order to compete.

Of late, the problem of counterfeiting has been eating into genuine brand business. Is that a concern for PepsiCo products?
Certainly we see the problem of counterfeiting in our case too, but it affects roughly less than 5% of our products. Technically, in our case counterfeiting is not happening in its truest form. But there are instances of people passing off a different product as ours. Like you go for buying a packet of Kurkure and are instead offered something that goes by the name of Karkare, with a similar looking logo as ours. This misleads the consumers, and it’s bad for the industry and the business.

For Planman Media in Dec. 2012