With consumption of carbonated soft drinks such as colas going down, the company is keen to increase the share of healthy products in its portfolio. While growth has remained muted (low single digit) in the Rs 14,000-crore domestic soft drinks market, the dairy segment, pegged at around Rs 99,000 crore, has grown by 13% in 2016 over 2015, according to Euromonitor.
«We are definitely looking at dairy, especially value-added products,» said Vipul Prakash, senior vice-president of beverages category at PepsiCo India. «But it won’t be just flavoured milk.»
PepsiCo’s rival CocaCola had forayed into the diary segment last year with ready-to-drink flavoured milk Vio. However, it failed to take off. PepsiCo India’s largest bottler Ravi Jaipuria, who also sells Cream Bell ice-cream, is betting on the dairy market with value-added products.
Prakash acknowledged that sales of soft drinks have been slowing down in the country. He attributed it to the maturing of the domestic beverage market. «I would be worried if the size of the beverage market had been shrinking,» said Prakash. «But that is not the case. A consumer has more choice today than what he had a few years ago, so he may be picking up products other than a sparkling beverage to satiate his drinking needs at different times during the day.»
Sales of value-added dairy products including lassi and buttermilk have been steadily growing, according to market researcher Nielsen. While volumes of health-based dairy drinks have increased by 30%, soft drinks have grown by only 10% in June 2016 over June 2014.
Store base has also increased by 60% for dairy drinks in the same period compared with 10% for soft drinks, said Nielsen.
Source: Times Of India
Link: http://timesofindia.indiatimes.com/business/india-business/pepsico-plans-foray-into-dairy-market/articleshow/58488278.cms
