PepsiCo to strengthen breakfast portfolio

Will go beyond oats with more global products.

With people increasingly taking to easy-to-make breakfast meals, PepsiCo India plans to expand its breakfast portfolio beyond oats by adding more global products.

Breakfast, according to the company, is an important category that has given it an opportunity to expand beyond beverages and snacks. Besides, the breakfast cereals market is pegged at Rs 375-400 crore and is growing at 30 per cent per annum. The company entered the breakfast category in 2006 with Quaker Oats. But this is the only brand in its breakfast portfolio at present. Globally, however, Quaker Oats exists in 20-30 formats, including cereals.

PepsiCo India Executive Vice-President (Marketing, Consumer strategy, Innovation and Portfolio expansion) R Rajesh told Business Standard: “We plan to introduce some local products suiting the Indian taste to expand our breakfast portfolio. We could also bring some products from our international breakfast portfolio.” He, however, did not name any products.

Kellogg’s is the market leader in the breakfast cereal market, but it doesn’t operate in the oats segment, where PepsiCo rules. PepsiCo, however, doesn’t rule out bringing the cereal format from the international Quaker portfolio. If it enters cereals, Kellogg’s monopoly will be endangered. The market is already hotting up.

In March 2009, Heinz India launched Complan Nutri Bowl Muesli. Analysts, however, don’t see much competition from Heinz as it’s not a focused player in the breakfast category. Nevertheless, Rajesh is unperturbed. “Kellogg’s operates in the cold breakfast category and we operate in the hot breakfast portfolio, which is more popular in India,” he said.

KPMG sector analyst Anand Ramanathan said: “If PepsiCo introduces cereal-based products, it will be a great fit for the company, though there will be some retaliation from Kellogg’s.”

PepsiCo will launch a new campaign within a few weeks to take forward the ‘Make India heart healthy’ mission it launched in September 2009. As part of the campaign, the company has embarked upon an integrated health drive campaign with an objective of creating awareness about heart health.