India is a profitable, priority market, says PepsiCo CEO

‘‘I would be very disappointed if India doesn’t become PepsiCo’s second — or third-largest business outside the US,’’ he said. With revenues of $700 million, India is PepsiCo’s fifth-largest market outside the US.

Over the next month or so, CEOs of major global corporations like Microsoft, Intel, and IBM will visit the country to talk business with the UPA government.

Reinemund said India is a profitable business, but did not give a detailed breakup. The former CEO of Frito-Lay was obviously pleased with the performance of the snacks business in India. ‘‘Lay’s is the fastest-growing business in PepsiCo. Local flavours give us a distinct advantage vis-a-vis the competition.’’

While he stressed that both businesses were performing and growing in double-digits, Reinemund said affordability in the soft-drinks business was a challenge the world over. ‘‘When you get the right affordability, you can maximise benefits.’’

India has an annual per capita consumption of 10-15 bottles of carbonated beverages. Despite huge investments, both Pepsi and Coke’s beverages operations are reportedly still in the red. PepsiCo India chairman Rajeev Bakshi added that the company would now focus on ‘‘depth of consumption as we do not see greater opportunity towards increasing the size of the beverages market, which is between 150 and 200 million consumers.’’ As Reinemund put it, ‘‘We’re seeing a trend where consumers will want a basket of products for different parts of the day.’’ This would include packaged water (Aquafina), juices (Tropicana), and niche brands like the recently-launched Gatorade.

While the government is still debating standards for aerated drinks — the Rajasthan High court recently delivered an order that soft-drink firms should specify on their labels the content and composition of the product, including the presence of pesticides and chemicals, if any — Bakshi said the company has just conducted a complete review of all plants on October 15, and was very interested in getting into much higher disclosure norms.

On the Rajasthan High Court verdict, Bakshi said PepsiCo was still studying the implications in detail.

Reinemund also said the company has no objective ‘‘one way or the other’’ towards increasing the number of company-owned units. PepsiCo’s 37 bottling plants in India include 16 company-owned ones and 21 owned by franchisees. ‘‘They (franchisees) play a very important role, one that can also be a constraint. Evaluation continues over a period of time, ’’ the CEO added.