India Is A Big Growth Space For Us: Ramon Laguarta, PepsiCo

PepsiCo Inc reported its second-quarter 2024 results with net income rising to $3.08 billion from $2.75 billion the previous year. Net sales increased nearly 1 per cent to $22.5 billion. The company's organic revenue, excluding acquisitions, divestitures and currency changes, grew by 1.9 per cent, driven by PepsiCo’s international business.

“During the second quarter, our business delivered net revenue growth, strong gross and operating margin expansion and double-digit EPS growth, remaining agile despite facing difficult net revenue growth comparisons versus the prior year, subdued category performance within North America convenient foods and the impacts associated with certain product recalls at Quaker Foods North America,” said Ramon Laguarta, Chairman and CEO, PepsiCo.

Laguarta continued, “For the balance of the year, we will further elevate and accelerate our productivity initiatives and make disciplined commercial investments in the marketplace to stimulate growth. These investments will focus on surgically providing optimal value propositions within certain portions of our North America convenient foods portfolio, amplifying our advertising and marketing initiatives and leveraging our go-to-market distribution capabilities to enable more precise marketplace execution. As a result, we now expect to deliver approximately 4 per cent organic revenue growth (previously at least 4 per cent) and have a high degree of confidence in delivering at least 8 per cent core constant currency EPS growth for full-year 2024.”

In the second quarter, developing and emerging markets like Egypt and Poland achieved double-digit organic revenue growth. India and Brazil posted high-single-digit growth while Thailand and Pakistan saw mid-single-digit growth. Mexico and South Africa recorded low-single-digit growth. Among international developed markets, Australia and the UK each experienced low-single-digit organic revenue growth.

"Year-to-date, we held or gained savoury snack share in China, India, Brazil, Australia, and Pakistan, and for beverages, we held or gained share in Australia, South Korea, China, Thailand, Pakistan, Egypt, Vietnam, Saudi Arabia, the U.K. and Brazil," the company said.

PepsiCo remains optimistic about the extensive opportunities for profitable growth within its $36 billion international business. The segment, comprising nearly 40 per cent of PepsiCo’s annual net revenue in 2023 boasts an attractive and expanding core operating margin. The company aims to enhance its footprint and market reach across various regions by providing a customised range of products, flavours and packaging options that resonate with local preferences, thereby ensuring global brands are locally relevant.

Speaking about international markets, Laguarta said on an analysts call, historically, “we've learned that the portfolio is quite diversified and that gives us the opportunity to talk about an International business as a total.”

On India, he said, “We continue to see a lot of growth in many parts of our AMESA region, In particular, India is a big growth space for us and is an investment area for sure. The opportunity is massive, if you think – if you take a decade perspective and we're putting infrastructure on the ground and we're putting a lot of – we're investing in the brands, make sure that we build the scale to capture what is going to be, I think, a high demand market for many, many years.”