Snacks and beverages major PepsiCo has registered a double digit organic revenue growth in India for the March-May quarter. Announcing its second quarter (12 weeks ended June 12, 2021) results globally, PepsiCo’s India business reported a double-digit volume growth as well in its food and beverages business.
PepsiCo India sells popular snacks like Lays, Kurkure, Doritos and beverages such as Pepsi, Slice, Mountain Dew, Tropicana, among others.
For the quarter, PepsiCo’s snack unit grew 116 percent on the back of the acquisition of Pioneer Foods’ and double-digit growth in India and Pakistan, the company said. For the beverages unit too, volume growth came in at 38 percent, “primarily reflecting a 4-percentage-point impact of our Pioneer Foods acquisition and double-digit growth in India,” the company said in its global earnings release.
Overall, PepsiCo’s net revenue grew by 20.5 percent to $19.22 billion in the quarter ended June 12.
“As mobility trends improved, our international beverage business accelerated and delivered 22 per cent organic revenue growth, while our international snack business delivered 11 per cent organic revenue growth,” the company added.
A double-digit volume growth for the Indian market comes at a time when the country witnessed a second COVID wave, its most severe yet registering the highest number of cases and deaths since the beginning of the pandemic. The second wave, which also hit rural markets this time around, further hit consumer sentiment and discretionary spending in a period that is considered peak season for the beverages industry, accounting for two-thirds of annual cola sales.
A CRISIL report in May had suggested that the soft drink business is unlikely to bounce back to pre-pandemic levels in the current fiscal and that full-year revenue may be 10 percent below pre-pandemic levels.
However, the double-digit volume growth for PepsiCo India also comes on the back of a low base where the months of March-May in 2020 saw the country being under a strict nationwide lockdown that hit sales of most consumer products companies badly as supply chains too saw major disruptions.
PepsiCo has also gained market share in beverages in India, along with other markets such as Egypt, Mexico, China, and Russia.
For the March-May quarter, the Africa, Middle East and South Asia (AMESA) region, which also includes India saw a 15 percent growth in revenue and a 34 percent volume growth.
“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,” the company said about the performance of the AMESA region.
The company also alluded to rising prices on the back of rising input costs in the US markets.