Reuters | PepsiCo Inc. plans to invest $2.5 billion in China over the next three
years to expand its presence in a major, growing market where its drinks
lag behind rival Coca-Cola Co.
The spending, announced Friday, comes in addition to the $1 billion
investment the soft drink and snack food giant announced in 2008 that
will be completed this year.
Emerging markets, particularly China, are critical growth engines for
soft drink makers, which have have experienced sluggish sales in recent
years in the saturated U.S. market.
Consumer Edge Research estimates that China will drive about 25 percent of global soft drink industry volume over the next five years.
PepsiCo’s new investment will go to new manufacturing facilities, a sihe global soft drink market over the next five years, by far,” Pecoriello said.
Pepsi shares fell 2.1 percent on Friday while Coke shed 0.7 percent.
PepsiCo currently operates 27 beverage and food plants and five farms throughout China and employs more than 20,000 people. It plans to open 10 to 12 new plants to manufacture soft drinks, noncarbonated beverages and snacks, and will install additional production lines in existing facilities.
PepsiCo will open plants in the provinces of Fujian, Gansu, Henan and Yunnan in the next two years.
PepsiCo CEO Indra Nooyi, who was in Shanghai to visit the Shanghai Expo, has been vocal about her plans to grow in emerging markets like China, India, Russia and Brazil as well as investing in healthier products.
The company will broaden its portfolio of Chinese-designed and developed products. It already sells products tailored to the Chinese market, such as Tropicana Guo Bin Fen juices and Cao Ben Le drinks inspired by traditional Chinese medicine, along with Lay’s potato chips in cool cucumber and crispy prawn flavors.
PepsiCo said it would build a research and developmxisting facilities.
PepsiCo will open plants in the provinces of Fujian, Gansu, Henan and Yunnan in the next two years.
PepsiCo CEO Indra Nooyi, who was in Shanghai to visit the Shanghai Expo, has been vocal about her plans to grow in emerging markets like China, India, Russia and Brazil as well as investing in healthier products.
The company will broaden its portfolio of Chinese-designed and developed products. It already sells products tailored to the Chinese market, such as Tropicana Guo Bin Fen juices and Cao Ben Le drinks inspired by traditional Chinese medicine, along with Lay’s potato chips in cool cucumber and crispy prawn flavors.
PepsiCo said it would build a research and development center in China to develop products for all of Asia.
It will open five new farms for potatoes and oats with advanced irrigation technology. PepsiCo already has farms in China, including a pilot farm in Baotou, Inner Mongolia.
