The Hindu Business Line : PepsiCo looks to export citrus fruit concentrate from India

New Delhi, Feb 24 Pepsi is betting on kinnow and other citrus fruits and hopes to start exporting fruit concentrate, that it is just started producing for itself from Punjab, in a few years time. Citrus is just the beginning; the beverage major whose fruit juice business is growing faster than its carbonated drink business, will be looking at tomatoes, mangoes and melons among other fruits in the future.

According to PepsiCo’s Mr Amit K. Bose, Executive Vice-President –Exports, it has already received queries from certain countries and sees demand from South-East Asian countries such as Thailand . The company is reducing by almost 30 per cent its dependence on import of citrus concentrate of from Pakistan and Brazil used for its Tropicana brand. The 450 tonnes of kinnow concentrate that will be produced at the Punjab State Government facility currently costs a significant 30 per cent more than its imports. But it is only a matter of time before critical scale and competitiveness is achieved said senior management.

“The immediate challenge is to get the supply chain and the procurement strategy in place. Ultimately we would like to be competitive in our agriculture initiatives here, and it is only a matter of time before the supply chain issues unravel themselves,” the PepsiCo’ Executive Director, Export, Agriculture and External Affairs, Mr Abhiram Seth, told Business Line.

The 10-acre facility has been set up by the Punjab Government in a 35 acres food processing park in Hoshiarpur. The multi fruit processing single line has a capacity of 400 tonnes a day; Pepsi’s already processing 340-350 tonnes a day. Capacity can be easily doubled with a second line and there are other lucrative opportunities such as recovering the citrus peel oil already being extracted from the kinnows, said Mr Bose. Used as flavouring, the oil can fetch between $200-300 per kg he added.

Come March, Pepsi will do a trial of 100 tonnes of carrot, in April, of 8,000 tonnes of tomatoes and in June and July, of mangoes grown in the region. The company is looking at other fruits too such as melons and water melons. “To make Pepsi’s juice and juice-based drink business competitive, the ultimate aim would be to meet our requirements from here and Punjab is one of the areas with great potential,” said Mr Seth.

It has the support of the State Government, which has set itself a target of doubling the 50,000 acres of kinnow to a million citrus cultivated acres by 2015. A processing unit in the State ensure prices stablity. A and B grade fruits are sold as table fruits, C and D are procured by Pepsi. “Unlike other crops, citrus farming is less stressful. And with Pepsi here, our minimum price is assured,” said Mr Parminder Singh, owner of about 70 acres of kinnow, which fetch between Rs 60,000 -1 lakh per acre.

A council has also been established to help farmers make the shift to new varieties of citrus fruits, untested in the market, with a lease and profit sharing arrangement. The council is paying farmers Rs 10,000 per acre till the first crop which typical takes about 4-6 years. Revenues from the orchard are shared equally till the 12th year, when the farmer gets his farm back along with a mature orchard.

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