PepsiCo hopes for 50% biz contribution from emerging markets
Last Updated: Thursday, November 3, 2011 - 19:52
New Delhi: Food and beverages major PepsiCo on Thursday said it is hoping for emerging markets to contribute at least 50 percent to its global revenues in the next five years, up from 40 percent at present.
The company, which is bullish on high growth in developing markets, is also using learnings from India in areas such as distribution to tailor them to suit requirements
of its businesses in the Western markets.
"PepsiCo today gets 60 percent of the business from the developed markets. But I think ideally if I could put a dream out for myself, in the next five years it should be split 50-50 between emerging markets and developed markets," PepsiCo Chairperson and CEO Indra Nooyi said while addressing the AdAsia 2011 conference here.
PepsiCo today is around USD 66 billion company in terms of revenues, she said.
Commenting on the quantum of investments being made in the emerging markets, she said: "We constantly look for acquisitions (in emerging markets). We look for companies that we can buy and build. We also look to make organic investments," she said.
Nooyi also talked about introducing global models into India and tweaking them as per the market here and vice-versa.
"We identify platforms and processes that we are very good at and then we constantly innovate on those platforms and tailor it for the local market," Nooyi said.
Companies that were born in the West, cannot export a western model all the time because they were made for big markets with lot of standardisation, she said.
She said the company is also taking learnings from India for retail and distribution.
"We can learn from a country like India. The drop size for our products is 2-3 bags (to a retail shop) here because big trucks cannot go to narrow streets here. In summer we may have to send products to retailers about 6-7 times a day because it has to get replenished all the time," she said.
She said the experience from India could even be used for big stores in developed markets, where products are sold off very quickly.
"So I look at the India business and say what a great learning lab and take these models to market that never thought they could learn from the East," she added.
First Published: Thursday, November 3, 2011 - 19:52