‘Health and wellness will be key growth driver for PepsiCo’

Vinay Kamath Chennai | Updated on January 09, 2018

Shivakumar, who stepped down as Chairman & CEO, PepsiCo India, talks about his four-year Pepsi journey

D Shivakumar, or Shiv as he's popularly known to all, said goodbye to PepsiCo on the last day of 2017 before he takes up his next assignment with the Aditya Birla group. In this interview, Shiv talks about how he helped shape PepsiCo India's transformation journey as its Chairman & CEO for four years. Excerpts:

What is the Pepsi you leave behind?

PepsiCo’s growth in India has been guided by “Performance with Purpose”, its fundamental belief that the success of the company is inextricably linked to the sustainability of the world around.

The India business has been running on this guiding principle where at one level, we have accelerated the portfolio transformation journey across categories, and at another level, we have augmented our sustainability efforts.

We have transformed our beverages and snacks portfolio. We have reduced sugar in existing or core products; we launched 7UP with 30 per cent reduced sugar through the use of Stevia in Gujarat last year; PepsiCo has been scaling up and expanding our alternate beverage portfolio with Lipton Ice Tea, Gatorade, 7UP Revive and the NourishCo portfolio.

We also reduced 5 per cent sodium in Kurkure Masala Munch and a reduction of another 15 per cent is on the way. We launched Quaker Oats with Milk, a grain dairy beverage designed as a convenient solution to enhance morning nutrition for young Indians, using our patented ‘SoluOats’ technology

Over the last four years, we have become water positive, and in 2016, we saved 14.48 billion litres more than we consumed in our manufacturing operations.

This was done through innovative irrigation practices like direct seeding, community water recharging initiatives, and by reducing the consumption of water in our manufacturing facilities.

What are the innovations that have come out of Pepsi in the past few years?

We have been on a journey of transforming our portfolio towards more nutritious offerings and scaling up our Go To Market (GTM) system. In the last three years, we have introduced 17 new products across our three product categories. If we add packaging innovations, we had a total of 87. Our portfolio transformation journey in India began with the introduction of 7UP Nimbooz; followed by 7UP Nimbooz Masala Soda (with 5 per cent lemon juice) in 2013 and its subsequent, continuing national scale up; 7UP Revive — India’s first hydrotonic drink and introduced mini-cans (150 ml) starting with Pepsi and now available on 7UP, Mountain Dew and Mirinda. We also introduced Mirinda Joosy in Tamil Nadu. Sweetened with Stevia and at 70 Calories per serving (250 ml), it has 50 per cent reduced sugar than normal Mirinda. This strengthens the company’s promise to develop India’s citrus ecosystem and has fruit juice sourced from orange fruit pulp grown in Indian orchards.

How is Pepsi making ‘better for you' products as compared to the fun products?

We are prioritising lower calorie, lower sugar offerings in our existing portfolio and at the same time, we are focussed on building Everyday Nutrition products that deliver whole grains, fruits and vegetables, dairy, protein and hydration to address emerging consumer needs. Among our goals for 2025 are: At least two-thirds of our global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-oz serving.

We are doing this in three ways in India: By reducing sugar in existing or core products; introduction of lower/zero calorie beverages; scaling up and expanding our beverage portfolio. The rate of sales growth of what the company refers to as everyday nutrition products will outpace the rate of sales growth in the balance of PepsiCo’s portfolio.

What are the larger trends shaping CSD and juice consumption?

There’s no question that consumer preferences are evolving. People are looking for greater choice and variety. At the same time, they don’t want to compromise on taste or convenience. We anticipated this trend many years ago and we have successfully expanded our portfolio to offer the range of choices consumers are seeking. Health and wellness will be a significant growth driver for PepsiCo. There are examples of this throughout our India business. The continued success of Quaker and Tropicana are two such examples.

There were reports that Haldirams has overtaken PepsiCo in the snacking category? Your comments?

While as policy, we do not comment on competition, we would like to submit though that for a comparison it is only fair to consider ‘like to like’ categories that the companies play in.

We continue to be the leaders in the salty snacks segment, which is also the fastest growing category in overall snacks. In the Western salty category, with strong double-digit growth, Lay’s has been our fastest growing food brand in the last year on account of premiumisation and innovation with Lay’s Maxx and Shapes. In the Nachos category, we scaled our presence with the ‘made in India’ Doritos, and the product is seeing strong preference and traction amongst consumers. We play selectively in namkeens. Overall, we remain confident about the superiority of our product offerings and our strategy for delivering value for our consumers.

What is the legacy you leave behind in Pepsi which you would like to see carried forward?

We have promoted a culture of openness, transparency, and of a non-hierarchical structure in the company. Towards this, we have established more frequent, consistent channels of communication, feedback across the organisation.

This has encouraged employees to help reshape our culture to make it transparent, disciplined and solution led. Over a period of time, we have built a very strong pipeline by giving people a mix of different critical experiences within PepsiCo India and internationally and continue to do so.

These are across levels and include a mix of Location Free roles, PepsiCo Corps and other India Region geographies.

Published on December 31, 2017

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