PepsiCo looks to tap smaller cities for breakfast cereals

Global snacks and soft drinks major PepsiCo is looking to expand the market for its breakfast cereals by entering smaller cities in India with its Quaker Oats brand.

The firm is betting big on the oats segment, which currently has a total market size of around Rs 200 crore in India, as it looks to tap consumers at the lower socio- economic segment.

 "It (oats) is urban but we are also trying to go down to the lower socio economic segment. We want to expand our consumer base. It is an urban product and within that we will go to tier I and tier II cities," PepsiCo Marketing Director (Food Segment) Vidur Vyas told PTI.

 He said the company will focus on affordability in order to grow the market for the oats segment.

"What we are trying to do is to ensure that our products remain affordable and accessible at all times," he said.

Asked what are the activities that PepsiCo is doing to keep the products affordable he said: "We are going to try and run special consumer offers, which will ensure that consumer try Quaker Oats."

Affordability is inherent to Quaker Oats. Today a bowl of oats costs about Rs 5. It is as affordable as one can get, he added.

At present PepsiCo sells its Quaker Oats at price points between Rs 32 and Rs 190 for pack sizes of 200 gm and 1.6 kg respectively.

"We are riding up our investment on Quaker Oats. We will continue to educate its heart benefits and come up with relevant product offerings...So our strategy is to ensure that health remains affordable and convenient," Vyas said.

The total breakfast cereal market in India is estimated to be around Rs 500 crore, comprising cornflakes, oats and muesli. The new entrants in the market include GSK Consumer Healthcare and Dr Oetker's. Besides, there are other players like Kellogg's and Bagrry's.

 Apart from Quaker Oats, PepsiCo sells snacks under the brand names 'Kurkure', Aliva and Lay's in India in the foods segment.