PepsiCo India ups presence with new snack manufacturing facility

08-Aug-2019 - Last updated on 08-Aug-2019 at 15:20 GMT

PepsiCo is far from the only global food brand to intensify its focus on India: Nestlé, Calbee and Kellogg's have all invested in the region this year. PIc: Getty Images/sara_winter

The owner of the Frito-Lay and Quaker brands broke ground on the site – which it hopes will double its snacks business by 2022 – in Uttar Pradesh in late July.

PepsiCo said the Rs 514 crore ($74m) investment, including a cold storage facility, is ‘in line’ with its plan to double sales in the world’s second most populous country.

Uttar Pradesh in northern India is the nation’s most populous state with 200m residents. For comparison, Indonesia currently sits around 265m people and Brazil at 210m.

The project will also entail ‘backward integration’ with local farmers, a program PepsiCo said will ‘help bring agricultural best practices to enable socio-economic growth for potato farmers’ in the state.

Ahmed ElSheikh, president and CEO of Indian operations, said PepsiCo remains committed to expanding its business there – in both snacks and drinks.

“Agriculture is at the heart of PepsiCo and our farmer friends are the backbone of our business,” he added. “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 farmers in the state.”

The Indian arm’s ‘Agri’ program already works with 24k farmers in 14 states across the country. Every Lay’s and Uncle Chipps potato is grown in India, according to PepsiCo, which also provides training and seed support, plant protection programs and assured buy-back.

Support – with hiccups

In April, PepsiCo India ran into a spat with potato farmers in Gujarat, in the western state of Mumbai – suing for intellectual property rights over what the company claimed were contracted potatoes. Facing backlash, it backed down the following month.

A PepsiCo spokesperson told BakeryandSnacks at the time that the company remained “deeply committed to the thousands of farmers we work with across the country and towards ensuring of best farming practices.”

To solidify the new snack plant, PepsiCo – celebrating its 30^th anniversary in India – signed a memorandum of understanding with government officials of Uttar Pradesh, for which ElSheikh expressed gratitude.

“Once finalized, [the facility] will act as a hub to address the growing demand for our well-loved snacks products amongst consumers in the state and beyond,” he said.