Pepsi targets breakfast space, local brands to grow business

Last Updated: Thu, Oct 20, 2011 19:41 hrs

In a bid to strengthen its product portfolio, Pepsi will increasingly devote its attention to targeting specific consumer needs. As part of this strategy, the food & beverage major will attempt to increase its product offerings in the breakfast space as well as launch products that will enhance its regional presence, according to PepsiCo India Chairman Manu Anand.

The firm has taken its first tentative steps in that direction by reviving the Duke’s range of soft drinks in Mumbai. In the past, Duke’s Lemonade, Duke’s Mangola and Duke’s Ice Cream Soda were popular among consumers in the country’s commercial capital. While Duke’s Lemonade was retained, the others were withdrawn some seven years ago from the market.

Anand says there was a latent equity for the brand, and it could be tapped. “Our consumer research showed that people in Mumbai had a fond memory of the brand. Duke’s was already there in our portfolio. So we thought why not revive it,” he told Business Standard.

As far as Pepsi’s breakfast initiatives go, Anand says the firm will roll out more products in the space by next year.

At the moment, Pepsi has Quaker Oats and its Tropicana juice portfolio which is consumed in the mornings. Anand says there is potential to grow given the opportunity that exists there. “The breakfast segment in India has been largely unorganised, with consumers preferring to eat what is prepared at home. We think there is an opportunity there.”

Pepsi’s attempts to strengthen its position in the breakfast segment comes at a time when companies such as Britannia and Marico are also eyeing the space. In the last one year, Britannia has launched ready-to-eat upmas, pohas, porridges and oats, while Marico is test-marketing a ready-to-eat masala oat in the south of India.

Traditionally, the organised breakfast market, which is about Rs 500 crore in size, has been dominated by players such as Kellogg's, which is mainly into cornflakes. In the last one year, Kellogg’s has also stepped into the oats segment with the launch of a product called Heart to Heart there.

But Anand says there is much more that can be done. He, though, would not indicate products Pepsi would launch in the segment.

By some estimates, the branded breakfast cereal market, which makes up the bulk of the organised breakfast category, is growing at a healthy 25 per cent and is likely to sustain this momentum for some time led by higher retail exposure.

Though almost 80 per cent of the branded breakfast cereal market has been cornered by cornflakes, wheat porridge, white oats and muesli, as well as breakfast cereal bars, are becoming popular.

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