NEW DELHI: Food and beverage major PepsiCo India aims to set up a mega food manufacturing plant in Uttar Pradesh, entailing investments of nearly Rs 514 crore over the next three years. The move is in line with the company’s plan to double its snacking business, which includes brands such as Kurkure and Lay’s in India by 2022 and is expected to create over 1,500 direct and indirect jobs.
“PepsiCo is committed to growing its food and beverage business sustainably in India. We have a long relationship with the people of Uttar Pradesh. As we look to double our snacks business over the next few years, we intend to invest Rs 514 crore approximately to expand our footprint in the state,” said Ahmed ElSheikh, president and CEO, PepsiCo India, adding that the company is committed to scale up the agri-food business here.
The company’s senior leadership team signed a memorandum of understanding with representatives of the UP government at the state’s second ground-breaking ceremony for projects worth Rs 65,000 crore.
ElSheikh also pointed out that the company’s intended snacks manufacturing operation in the state would also expand its footprint of collaborative farming for potato in the state.
“Agriculture is at the heart of PepsiCo and our farmers are the backbone of our business. As we expand our operations, we will look forward to a fruitful association that will not only help create jobs and enable ancillary industries, but also ensure the socio-economic progress of potato farmers in the state,” he said.
Despite being an early bird in branded packaged snacks, PepsiCo India faces tough competition in this category even with a surge in the country’s consumption of such products. The company was a pioneer in this segment, introducing global-standard potato chips under the Lay’s label and crunchy snacks under Kurkure. Today, it faces stiff competition from ITC, Haldiram Foods and Balaji Wafers in the Rs 28,000 crore snacks market. Parle Products are also catching up.
The savoury snacks category grew at a 19 per cent compounded annual growth rate since 2013, the highest among all snacks categories, according to estimates by research firm Euromonitor. This growth will remain high at 22.3 per cent till 2022, again the highest as compared to other categories.
Over the last year, PepsiCo has come up with close to a dozen local flavours, changed its packaging to highlight the transformation by placing pictures of regional flavours and spices, and tried formats favoured by Indians. It is further raising the pitch in the profitable snacks business, now close to 45 per cent of its Rs 6,540 crore annual sales.
Expansion mode on
PepsiCo India will set up a greenfield snacks manufacturing plant in Uttar Pradesh
The company signed an agreement with representatives of the UP government for projects worth L65,000 crore
The move is in line with the firm’s plan to double its snacks business and is expected to create over 1,500 direct and indirect jobs