Companies

PepsiCo sees faster growth in rural markets for salty snacks

G Balachandar Chennai | Updated on August 30, 2018

Jagrut Kotecha, VP-Snacks Category, PepsiCo India

Launches healthier version of puffed snack Cheetos

 

Beverages and snacks major PepsiCo expects the rural market to grow faster than urban areas for snacks business, helped by multiple factors.

“The ₹20,000-crore (organised) salty snacks segment has been reporting a steady growth. Over the past few years, it has been growing at 10-12 per cent and it is expected to maintain the same level of growth. But the rural market is growing faster than urban with 2-3 percentage points more in growth rate. It’s a trend we have been seeing and I believe it will continue for next 2-3 years,” Jagrut Kotecha, Vice President – Snacks Category at PepsiCo India, told BusinessLine.

Accessibility to branded products is improving in rural areas thanks to better infrastructure. Companies have also found solutions to give products at price points which make sense to rural customers.

“The frequency could be lower when compared with metros, but it keeps moving up. Higher disposable incomes, farm subsidies, MSPs and other activities in a way drive consumption in rural locations, he added.

Also, with digitisation and Internet, people get a lot more opportunities to explore and try out new products. As these things happen in Tier 2 & Tier 3 towns, the rural areas around those locations also catch those habits and lead to consumption growth, said Kotecha.

Meanwhile, the company has introduced Cheetos-Ocean Safari, a puffed snack targeted at kids, that has been made with whole wheat flour for wholegrain nutrition. It will be available in four 3D animation shapes of Dolphin, Shark, Starfish & Octopus priced at ₹5 and ₹10 packs in the cities across South and West India.

“Probably, this is the first A2K (advertisement to kids)-compliant product in this category in India. It will have more nutritional value and low salt and fat contents,” he said.

The company has reduced 5-25 per cent sodium across various variants of its snacks master brands — Lay’s and Kurkure (each one is ₹1000 crore plus brand) and reduced 15 per cent saturated fat in the entire Lay’s potato chips range.

Published on August 30, 2018

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