PepsiCo is set to significantly increase its investments in India, announcing a Rs 5,700-crore expansion plan by 2030. The snacks and beverages giant is betting big on one of its fastest-growing markets following a robust performance last year.
Strong Financial Performance
The company reported its second consecutive year of double-digit growth, with revenue reaching Rs 9,798 crore, an 8% increase year-on-year. Profit rose 4.5% to Rs 905 crore, according to PepsiCo India and South Asia CEO Jagrut Kotecha. The growth was primarily driven by the foods business, which saw an 11% increase across core brands such as Lay's and Kurkure.
Investment Focus on Snacks Manufacturing
A significant portion of the planned capital expenditure will be directed towards expanding snacks manufacturing capacity. This move comes as innovative products begin to make meaningful contributions, with PepsiCo increasing R&D spending by approximately 15% year-on-year to drive 'India-for-India' innovation.
Beverages Business Faces Headwinds
The beverages segment, however, encountered challenges from weak weather conditions and intensified competition, which weighed on demand last year. Despite these headwinds, the company remains optimistic about the Indian market.
Strategic Outlook Amid Industry Challenges
The investment push comes at a time when the FMCG industry is grappling with geopolitical uncertainties, volatile consumer demand, and a growing shift towards healthier options. Kotecha described India as one of PepsiCo's top 13 markets globally with long-term potential, emphasizing continued investment in innovation, R&D, and future-ready product portfolios tailored for India.
While volatility and uncertainty remain high, current demand signals in India are encouraging, supported by low per-capita consumption and the ongoing shift from unbranded to branded products. 'We will look month after month, keep our ears to the ground, to the consumer and to market sentiments, and make those choices from time to time,' Kotecha said.
Affordability Strategy
The company's broad affordability range will help address downtrading pressures, with snacks priced between Rs 5 and Rs 100 and beverage packs starting at Rs 10 in select markets. This strategy positions PepsiCo to capture demand across various consumer segments.
PepsiCo's expansion plans underscore its confidence in India's growth story, with a focus on local innovation and capacity building to meet evolving consumer preferences.
