PepsiCo India reports double-digit growth in June-Aug
“The recovery from the Covid–19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance,” PepsiCo global chairman Ramon Laguarta said in an earnings statement.
The March-June period had seen India hit by a devastating second wave of the Covid-19 pandemic, resulting in state-wise lockdowns, restricted timings of malls and marketplaces and closures of restaurants and hotels. However, in-home consumption of foods continued to grow, and starting August with lower Covid-19 cases, improved vaccination and easing of restrictions, out-of-home consumption also started to report higher numbers.
PepsiCo had reported double digit growth in the March-May 2021 period also on a low base. The beverage and snacks maker raised its full-year forecast after its quarterly earnings and revenue exceeded street expectations, with the company’s organic revenue up 9% in the quarter. “Beverage unit volume grew 19%, primarily reflecting double-digit growth in India. The snacks unit volume grew 5%,” the company said in its earnings statement.
The April-June months contribute more than half the annual sales of the Rs 20,000 crore organised packaged beverages category. Out-of-home channels typically account for over half of annual soft drinks sales.
PepsiCo’s bottling partner in India, the listed Varun Beverages (VBL), accounts for over 85% of PepsiCo’s beverage sales volume in India and makes and distributes Pepsi, Mountain Dew and Tropicana juices. “Higher focus on penetration will help gain incremental market share. With the impact of the Covid-19 pandemic gradually subsiding, on the back of significant improvement in the distribution network, VBL is expected to post strong volumes in CY22,” financial services firm Motilal Oswal wrote in a report last week.