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Thursday, Jun 12, 2003

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PepsiCo hives off non-cola business

Ratna Bhushan

NEW DELHI, June 11

THERE'S a new fizz at PepsiCo. In a significant restructuring exercise, PepsiCo India Holdings has split its soft drinks and other beverages businesses into two separate units.

Under the new business structure, PepsiCo's 100 per cent juices, juice-based beverages and the forthcoming bulk water project have been clubbed together and will operate as a single business entity as part of the company's `new businesses' division, Mr Abhiram Seth, Executive Director, Exports & External Affairs, PepsiCo India Holdings, told Business Line.

This division is being headed by Mr Subroto Chattopadhyay, Executive Director (New Business), Pepsi Foods. "The new division has been created to cater to products that have limited distribution," Mr Seth said.

In line with global trends, the domestic market too is seeing healthy growth of non-aerated beverages. In India, in recent years, product categories such as juices, juice-based drinks and retail packaged water have been registering high growth rates.

According to Mr Chattopadhyay, the period between 1999-2002 has seen the juices category grow at 20 per cent, juice-based drinks registered growth rates of 12 per cent, and packaged water grew by 26 per cent.

While Tropicana comes under PepsiCo's 100 per cent juice portfolio, the company's juice-based drink basket includes Slice. The soft drink major is now working on extending its packaged retail water brand, Aquafina, to the bulk water segment.

PepsiCo's soft drink business, on the other hand, has been spun off as a separate operating division. Soft drinks, too, have seen good growth rates in the current calendar year, with the industry having grown at 35 per cent in the April-May period. The growth has come primarily on account of price rationalisation, higher penetration in rural markets, and capacity expansion.

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