Food products keep Pepsi fizz going

Food contributes more revenue than beverages for the first time.

Pepsi India’s revenues are getting more fizz from its food products than beverages and soft drinks. While sales of beverages grew in single digit to Rs 1,073 crore in 2006-07 compared to the previous year, food products sales went up by around 19 per cent to Rs 1082 crore during the same period.

This is perhaps for the first time ever that India's number one cola brand has seen such a trend.

Moreover, Pepsi India is operating well below its optimum capacity -- less than 50 per cent of installed capacity in the soft drinks segment and just over 60 per cent in food products such as Lays and Kurkure, mainly because three of its manufacturing facilities have been hurt by reduced ‘glass volumes’.
 

PEPSICO FY07
Worldwide Revenue	$39 billion
Net Profit	$5 billion

PEPSI INDIA
In Rs cr	FY06	FY07	Change in %
Revenues	1,856	2,123	14.4
Net Loss	64	5	-92

Growth in Revenues
Beverages	8%
Potato chips	20%
Namkeen	17%

 

While Pepsi India may not have much to boast about its numbers, the company can still possibly take heart from the fact that it is perceived to be doing better than its biggest competitor Coca Cola. On financials, PepsiCo India Holdings reported a net loss of Rs 5 crore on a turnover of just over Rs 2,000 crore for the same year. This means India contributes barely 1 per cent to the company’s global turnover.

This performance is still a marked improvement over FY06 and earlier years. Pepsi India has accumulated losses of close to Rs 500 crore since it began operations in the early 1990s.

Pepsi's parent company has sufficiently funded the Indian operations with a paid-up equity capital base of over Rs 1,000 crore. PepsiCo reported worldwide revenue of $39 billion and a net profit of over $5 billion in FY07.