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PEPSI – Yeh Dil Mange More…Aha😃

As a consumer whenever F&B as a term pops up be it on TV or newspapers, the only opportunity our minds can think of is restaurants and we ignore the other products which have quietly occupied our lives.

Humans are social animals and since the ancient times, we humans have been finding ways to disconnect ourselves from our daily lives and enjoy just being around and talk about random stuff with fellow human beings. Food and beverages have always been the central part of such events and it’s our urge of having such conversations over a drink or a plate of food is something which has made the F&B industry such a lucrative one.

As a consumer whenever F&B as a term pops up be it on TV or newspapers, the only opportunity our minds can think of is restaurants and we ignore the other products which have quietly occupied our lives.

The game is all about scale in the F&B sector. You need not have a full blown menu of dishes at your disposal, instead you can choose a single product to build your identity and then scale it like crazy and if people seem to be loving what you’ve created, then you’re well on your way to becoming a billion-dollar brand which people can’t live without.

Pepsi, yes that black fizzy drink which compliments every food item under the sun be it pizza, burrito, fried chicken or our very own biriyani is one such billion-dollar brand. It’s parent company PepsiCo is a multibillion-dollar conglomerate which has an army of foods, snacks, and beverages which have been tingling the taste buds of millions across the globe everyday and bringing in billions in revenue every year. With annual sales of about 64 billion dollars, PepsiCo. owns 22 brands which bring in billion-dollar sales every year. That’s one hell of a conglomerate to behold.

But the question is how did Pepsi or PepsiCo become so big?

Respecting brand ethos:

For a brand as big as Pepsi, trying and experimenting new things is the easiest task yet it never tried to move away from its core identity and brand ethos. Essentially PepsiCo is a company centered around the idea of creating snacks and beverages for people to celebrate their good times. Their products, new acquisitions and everything else in some or the other way upheld this core principle of their brand. All that the corporation was and is doing, is aligned perfectly with what their brand stands for and wants to accomplish.

Strategic acquisitions:

PepsiCo’s core product was their drink Pepsi for a long long time. Pepsico realized very early on in their journey that in order to sustain they need to venture into other categories as well. Mind you, when a big corporation decides to diversify there’s a very high chance of falling prey to shiny and fancy ideas. The fact that these corporations have loads of cash to spend, it generally makes them risk-averse and end up losing money on idiotic initiatives and high priced acquisitions which yield no results. Their acquisitions of Frito Lay’s chips, Mountain Dew, Thums Up or restaurant chains like KFC, Pizza Hut and Taco Bell, were all a natural extension of their core product lines of snacks and beverages. They also made significant investments on the healthier sides of foods and beverages like acquiring Tropicana juices and Quaker oats company.

Divesting at the right time:

Sometimes having too many subsidiaries or offshoot brands can also hurt a business. It gets noisy and overburdens the decision makers and PepsiCo too faced this situation with their restaurant chains. They took the right step in the spinning of this restaurant based businesses and bought them all under a single operating entity which is named as Yum! Brands. Yes Yum! Brands is the parent company of our favorite American fast food restaurants like KFC, Pizza Hut, Taco Bell and which are collectively owned by PepsiCo. This restaurant business itself brings in 7 billion dollars of sales every year.

Focus on R&D and product development:

As consumers, we never really appreciate the kind of work that goes into getting that packet of chips or any other snacks in our hands. Pepsi spends millions of dollars every year in creating new flavors and grain formulations to continuously keep expanding and perfecting their snack offerings. So much so, that even the portions and the packages are also well thought out. KurKure which is one of the most popular packed snacks of India was born out of such product development exercise of Pepsi when they wanted to create a more Indian snack to appeal to Indian customers.

All and all PepsiCo is one of the most prominent brands of our century, whose journey of over 100 years is filled with plenty of lessons budding and aspiring entrepreneurs can take away from. With their team of able leaders like Indra Nooyi who had taken the brand to greater heights and the present CEO Ramon Laguerta, who are working hard in turning PepsiCo’s image into a more health conscious and environment friendly brand- we will be seeing many more introductions of new lines of beverages, snacks and fast food menus in the coming days which are going to be more healthier than their previous iterations.

Let us know in the comments what did you learn from this article?

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