PepsiCo flags rising competition, slower growth in India beverage market

PepsiCo CEO Ramon Laguarta says weather and intensified competition have slowed India's beverage growth, though foods category remains resilient

For beverage and snacks major PepsiCo, rising competition in India’s beverage sector has led to growth moderation, the company’s top leadership told analysts on Thursday during an earnings call after announcing its September quarter results.

 

PepsiCo reports second straight quarter of slower India growth

  For the 12 weeks ended September 6, unit volume declined 1 per cent in its international beverage business category, “primarily reflecting declines in Mexico and India, partially offset by growth in the Middle East,” stated the company’s prepared management remarks.

 

This marked the second consecutive quarter of declines in India for the US multinational. In the 12-week period ended June 14, the company had reported a 1 per cent unit volume gain, offset by a decline in India.

 

 

“Growth in India has been slowed due to weather and the competitive situation in the country’s beverage sector, which will impact growth for a couple quarters, but it is coming back," Ramon Laguarta, chairman and chief executive officer, PepsiCo, told analysts.

 

Reliance’s Campa Cola triggers price war across beverage market 

The competitive landscape has shifted since Reliance Consumer Products launched Campa Cola in 2023, undercutting rivals on price and offering distributors incentives to push its products. This triggered a margin war across the supply chain and forced established players to rework pricing strategies.

 

“Most deceleration in the international markets was linked to bad weather, but September has been strong, with growth coming back in the mid-single digits. The consumer is stressed all around the world,” Laguarta added.

 

Foods category sees growth led by India and Asia-Pacific 

Meanwhile, in its convenient foods category, “unit volume grew 3 per cent in the Asia-Pacific market, primarily reflecting growth in India, Australia, and Thailand, partially offset by a decline in China,” the company said.

 

PepsiCo sells brands such as Kurkure, Lays, and Quaker Oats in foods, and Pepsi and Mountain Dew in its beverage portfolio.

 

PepsiCo tweaks packaging to stay competitive in Indian market

To aid growth, PepsiCo India in August increased the grammage of its Rs 40 priced PET bottle to 740 millilitres (ml) from 600 ml earlier.