INDIA – Beverage and snacks maker PepsiCo’s chief executive Indra Nooyi said Tuesday in a post-earnings investors call that wherever the company ‘finds a good bottler which can run the business better than PepsiCo, the company will refranchise’.
She was responding to an analyst query on whether the company would refranchise its bottling operations further in India.
“Internationally, when we find a very good bottler and we believe that they can run the business better than us, we will refranchise the business. We look across our portfolio internationally to see where it makes sense,” she said.
ET had reported last week that RJ Corp, PepsiCo’s biggest bottler in South Asia, is keen on acquiring additional franchising rights of the beverage maker in India.
RJ Corp already owns the franchise for PepsiCo’s beverage business in the North and East regions.
PepsiCo had also signed a distribution tie-up with RJ Corp promoted company Varun Beverages for Tropicana juices, Gatorade sports drink and Quaker Oats last month.
Varun Beverages now owns PepsiCo’s bottling franchisee rights for 20 Indian states and two Union territories.
Nooyi said PepsiCo grew in “mid-single digits” during the October-December quarter in India, and that post the roll-out of the Goods & Services Tax (GST), the India market is ‘coming back’.
The Indian government implemented GST, the country’s biggest tax reform, on July 1 2017.
Stating that India and Mexico posted good mid-single-digit growth in the quarter, Nooyi said: “Organic revenue growth outside North America was fuelled by continued strong performance in developing and emerging markets, which posted organic revenue growth of 7% as a group.”
For the fourth quarter ended October-December 2017, PepsiCo reported revenues of $1.89 billion for the Asia, Middle East, North Africa (AMENA) region, a 6% revenue growth.
The maker of Pepsi Cola, Mountain Dew and Lays chips said in its earnings statement that the region was positively impacted by refranchising in Jordan, productivity gains and a gain on an asset sale in India.