labels: Foods / beverages, Marketing
PepsiCo to launch 'affordable' snack news
17 November 2008

Food and beverage maker PepsiCo India Holdings Pvt. Ltd is planning to launch a Rs1/2 ''affordable'' nutritious food product.

The initiative is in line with the United Nations' Millennium Development Goal to eradicate extreme poverty and hunger by 2015. At least 6,000 Indian children below the age of five die every day due to malnourishment or lack of basic micronutrients, according to the National Family Health Survey (NFHS-3) conducted between December 2005 and August 2006.

This step by PepsiCo, besides reducing malnutrition, will strengthen the company's business in India's rural and semi-urban markets.

''The product has to be affordable for the bottom of the pyramid, those who are poor and suffer from malnutrition. So, we have ball-parked a range of Re1 or Rs2,'' Sanjeev Chadha, chairman of PepsiCo India.

Chadha did not specify the nature of the product, nor is the price yet final. ''It should take another 18-24 months for the product to come out in the market,'' he claimed.

PepsiCo is planning this initiative for quite some time now and, during her visit to India in September, Indra Nooyi, chairperson and chief executive of PepsiCo Inc., had mentioned this.

PepsiCo, recently announced a $500 million (Rs2,475 crore) investment in India over the next three years.
''According to our estimates, the total number of rural households is expected to be around 153 million by 2009-10, and these markets are still not very well penetrated,'' said Sumit Chopra, head of consumer markets research and consulting at Data Monitor India.

Rural areas account only for 30-35 per cent of the sales of consumer products in India, he said.

Industry observers say it's unlikely the company will market the new product under the Frito-Lay portfolio, which includes snacks such as potato chips.

The investment will be for manufacturing capacity, market infrastructure, environment sustainability initiatives, R&D and agriculture. The new investment will aim at generating 50,000 direct and indirect jobs in India. PepsiCo has invested $700 million since its entry into the country in 1989, employing 4,000 people directly and about 60,000 others indirectly

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PepsiCo to launch 'affordable' snack