INDIAN SOFT DRINKS MARKET

PROFILE OF THE INDIAN SOFT DRINKS MARKET

Soft Drinks Background:

Non alcoholic soft drink  beverage market can be divided into fruit drinks and soft drinks.  Soft  drinks can be further  divided into carbonated and non-carbonated drinks . cola lemon and oranges are carbonated drinks while mango drinks come under non carbonated category. The soft drinks market till early 1990s was in hands of domestic players like campa, thumps Up, Limca etc  but with opening up of economy and coming of MNC players Pepsi  and coke the market has come totally under their control. While world wide coke is the leader in carbonated drinks market in India it is Pepsi which scores over coke but this difference in fast decreasing (courtesy huge ad-spending by both the player). Pepsi entered Indian market in 1991 coke re-entered (after they where thrown out in 1997, by the central government) in 1993.

Pepsi has been targeting its products towards youth and it has struck right chord with the market and the sales have been doing well by sticking to this youth bandwagon. Coke on the other hands struggled initially in establishing it self in the market. In a span of 7years of its operations in the country is changed its CEO four times but finally they seem to have started understanding the pulse of Indian consumers.

Soft drinks are available in glass bottles, aluminum cans and pet bottles for home consumption. Fountains also dispense them in disposable containers.

Segmentation:

The soft drink market can be segmented on the basis of consumption or on the basis of type of products.

The segmentation on the basis of place of consumption divides the market into two parts:

One-premise-80% of the consumption of soft drinks in on premise i.e. restaurants, railways stations, cinema etc.

At –home- the rest20% of the compromises of the soft drinks purchased for consumption at home.

The market can also to segmented on the basis of products into cola products and non-cola products.

Cola products account for nearly 61-62% of the total soft drinks market. The brands that fall in this category are Pepsi, coca-cola, thumps up, diet coke, diet Pepsi etc.

Non-cola segment which constitutes 36% can be divided into 4 categories based on the type of flavors available, namely:

Orange                                         Cloudy Lime

Mango                                          Clear Lime

 

Profile of Pepsico

Overview

PepsiCo is a world leader in convenient foods and beverages, with revenues of about $25 billion and over 142,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products. PepsiCo brands are available in nearly 200 countries and territories.

Many of PepsiCo's brand names are over 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.

PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people.

PepsiCo’s mission is to be the world's premier consumer products company focused on convenience foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

PEPSICO HEADQUARTERS

PepsiCo World Headquarters is located in Purchase, New York, approximately 45 minutes from New York City. The seven building headquarters complex was designed by Edward Durrell Stone, one of America's foremost architects. The building occupies 10 acres of a 144-acre complex that includes the Donald M. Kendall Sculpture Gardens, a world acclaimed sculpture collection in a garden setting.

The collection of works is focused on major twentieth century art, and features works by masters such as Auguste Rodin, Henri Laurens, Henry Moore, Alexander Calder, Alberto Giacometti, Arnaldo Pomodoro and Claes Oldenberg. The gardens were originally designed by the world famous garden planner, Russell Page, and have been extended by François Goffinet. The grounds are open to the public, and a visitor's booth is in operation during the spring and summer.

Pepsi-Cola North America and PepsiCo Beverages International

PepsiCo’s beverage business was founded at the turn of the century by Caleb Bradham, a New Bern, North Carolina druggist, who first formulated Pepsi-Cola. Today consumers spend about $33 billion on Pepsi-Cola beverages. Brand Pepsi and other Pepsi-Cola products – including Diet Pepsi, Pepsi-One, Mountain Dew, Slice, Sierra Mist and Mug brands – account for nearly one-third of total soft drink sales in the United States, a consumer market totaling about $60 billion.

Pepsi-Cola also offers a variety of non-carbonated beverages, including Aquafina bottled water, Fruitworks and All Sport.

In 1992 Pepsi-Cola formed a partnership with Thomas J. Lipton Co. Today Lipton is the biggest selling ready-to-drink tea brand in the United States. Pepsi-Cola also markets Frappuccino ready-to-drink coffee through a partnership with Starbucks.

In 2001 SoBe became a part of Pepsi-Cola. SoBe manufactures and markets an innovative line of beverages including fruit blends, energy drinks, dairy-based drinks, exotic teas and other beverages with herbal ingredients.

Outside the United States, Pepsi-Cola soft drink operations include the business of Seven-Up International. Pepsi-Cola beverages are available in about 160 countries and territories.

Pepsi-Cola began selling its products internationally in 1934 with its operations in Canada. Operations grew rapidly beginning in the 1950s. In addition to brands marketed in the United States, major products include Mirinda and Pepsi Max. Pepsi-Cola North America includes the United States and Canada. Key international markets include Argentina, Brazil, China, India, Mexico, Philippines, Saudi Arabia, Spain, Thailand and the United Kingdom. PepsiCo Beverages International also produces, sells and distributes Gatorade sports drinks as well as Tropicana and other juices internationally.

Pepsi-Cola provides advertising, marketing, sales and promotional support to Pepsi-Cola bottlers and food service customers. This includes some of the world's best-loved and most-recognized advertising. New advertising and exciting promotions keep Pepsi-Cola brands young.

PepsiCo Mission Statement:

PepsiCo's overall mission is to increase the value of our shareholder's investment. We do this through sales growth, cost controls and wise investment of resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

Profile of Pepsi Foods India limited

Pepsi foods India Ltd. Is owned by multinational giant of Beverages Pepsi Co., Inc., of New York U.S.A which has a turn over of $25 billion in the world. In entered the Indian market in 1990 in a joint venture with Voltas and Punjab Agro with an investment of $ 95 million and is now planning to pumps in $ 100 million more to make Pepsi No. 1 soft drink.

After the liberalization of Indian economy Pepsi foods brought out the shares of Volta and increased its stake to 92%. Now Pepsi foods 99% and 7% PepsiCo subsidiaries.

The Head quarters of Pepsi foods in New Delhi and its own six bottling plants in key markets. It controls its own bottle plant and other bottling franchise from Delhi. The company has adopted an aggressive marketing and advertising campaigns.

The capacity of the present Indian Soft drink market is around 291 million cases of which Pepsi has a market share of 49% as per IMRB survey in the Indian Soft drink market.

Profile of Hyderabad Beverages Pvt. Ltd.

Soft drinks in India are run on franchise basis like the other franchise operating other parts. Hyderabad Beverages Pvt. Ltd. company operating as franchise [bottlers] for Pepsi Foods India Limited beverages from 1991 when Pepsi was launched in Hyderabad on 7^th march 1991. Mr. S K Jaipura Charminar and Mr. George as operation manager from Pepsi foods India limited head Hyderabad Beverages for Hyderabad Beverages Pvt. Ltd. 

The Functions of Hyderabad Beverages Pvt. Ltd.

v     Bottling [production]

v     Distribution

v     Sales

v     Marketing

v     Local advertising

v     Administration of day to day activities

Distribution channels of Hyderabad Beverages Pvt. Ltd. It adopts three ways distribution for supply of brands.

v     City market

v     Up country market [district]

v     Credit outlets

v     Existing Distribution Channel of Pepsi in Gulbarga City.

Pepsi Co.--------> C & F Agent of Pepsi Co --------> Retailers -----> Consumers

v     Existing Distribution Channel of Pepsi in Gulbarga District.

Pepsi Co. -----> Distributor-----> Sub Distributor ---->Retailers ----> Consumers

v     Credit Outlets

Pepsi Co. ---------> Outlets

These are special outlets such as Star Hotels, AOC, Air force, Police, Star Clubs etc., which are supplied directly by the factory and business is carried out on credit basis.