Pepsico India Make the Most of This Opportunity!
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PepsiCo Confidential 2 Ghar ke Baahar bhi Maximizing Out of Home Eating & Drinking Opportunities for PepsiCo As the year draws to a close, there is much excitement in the PepsiCo office. It is that time of year when plans are made for the next year, and senior leaders in the company are making choices – where should we resource ahead of the curve? India is an exciting market, and has always been a key focus area for PepsiCo. Among the many exciting opportunities present, one of those that is being discussed more often these days is the exciting out of home arena. Globally a huge business, this is now finally taking shape in India too. The buzz around this is evident, as seen by the number of people consuming some beverage or snack while out on the streets or restaurants and malls!. Clearly, there is something here that merits serious attention and resourcing! Inviting India’s brightest young minds to help PepsiCo India make the most of this opportunity! PepsiCo is waiting to hear from you! PepsiCo Confidential 4 The question you are invited to help us answer How should PepsiCo India participate in the rapidly expanding business opportunity provided by increased out-of-home eating and drinking?* What is the best end-to-end business solution to monetize our brand and equipment assets, to ensure we gain on every front viz. • Volume & Value • Profit • Equity • Partnerships *also referred to as On Premise(OP) or Foodservice (FS) within the industry PepsiCo Confidential 5 CONTENTS 1. The opportunity 2. Key insights, trends, information data-bank • Consumer • Customer • Pepsico 3. Best practice case studies - inspiration 4. What we expect from you 5. Appendix • About Pepsico • Business fundamentals PepsiCo Confidential 6 1. THE OPPORTUNITY Young On-the-Go lifestyles seek food & drink on the move More young people Urbanization, personal on the move – mobility and longer students, working commutes means women, working men time starved people populations increasing want to eat and drink significantly on the move OPPORTUNITIES: Packaging (convenience, fresh, cool etc…) Ready to Eat Ready to Cook/Half Cooked PepsiCo Confidential 8 This has spurned over a trillion $ food service industry! Globally, Food Service comprises a mix of channels serving almost 50% of FB consumption occasions, All Out of Home Channels Airports & Restaurants Sports Vending Hotels Stadiums Hospitals Welfare & Services Workplace Education On-board Leisure Retail Street & mobile vendors Hotels & lodging Nightclubs Takeaways Cafés Pubs/bars Recreation Cafeterias Education QSR Parks, Movie (Workplace, (Schools University) Theaters, etc. Healthcare, etc.) 40-50% FSR Global FS sales (manufacturer) QSR=Quick Service Restaurant; FSR=Full Service Restaurant; FB= Food & Beverage PepsiCo Confidential 9 In India, too the Food Service footprint is large, varied & growing Eateries & Dining Entertainment Travel & Lodging Business and Institutions Cafes & Bars College/Univ. Clubs/Bars FSR Hotels Workplace Theme Parks QSR Govt & Military Catering & Kiosks & Food courts Cinemas Travel Social Services PepsiCo Confidential 10 A platform to build both revenue and brand equity Drives Beverage & Snack Large and Growing Volume Adoption Growing faster than retail since the Compared to home, consumption last 3 years in India, and globally of specialty beverages are higher too and consumption of snacks as a meal replacement are higher Unique Access to tough-to- Drives Brand visibility and reach consumers equity Has higher per capita trips than Allows controlled quality brand retail among a core target – youth, activations in the “right” mood and working men, upper SECs environment SEC= Socio Economic Classification PepsiCo Confidential 11 In India, PepsiCo’s On Premise Sales have had a great run over the last 5 years… Volume Growth Share Hi Double Digit Growth CAGR ON PREMISE CHANNEL LEADERS Urban Advantage Regular >10% Volume Mix & Brand Growing! Activations PepsiCo Confidential 12 QSRs and T&L most important channels for beverages today… and tomorrow! Contribution 1% Others Ent’t 11% B&I 10% The top contributors to growth 2012- 2016 T&L 21% Tier 1 growth drivers Retail Café/Bar 4% 1. QSR FSR 10% 2. T&L Next level growth drivers 1. Entertainment QSR 43% 2012 QSR- Quick Service Restaurant; T&L- Travel & Lodging, B&I – Business & Institutions PepsiCo Confidential 13 Led by key accounts who will drive growth • Top 5 Global QSR’s Global QSR key contributes 85% of Acceleration of • Rapid growth in regional accounts growth growth in QSR’s cities expanding • Outlet growth of 20% rapidly per annum Travel & Lodging Market leaders • TAJ and ITC to contribute • Room nights set to to significant portion of growth through double over next 5 years strengthening new development their share of T&L the total growth • PVR and INOX becoming • Number of multiplex Cinemas Rapid growth more dominant, screens to double by dominated by key acquiring smaller through Cinemas 2018 players National operators Source: Euromonitor PepsiCo Confidential 14 Channels provide different benefits to PepsiCo XX X XX Railways Institutions X X X X QSRs/Food Courts X Hotels Vending X X X X X X FSRs Airports Profitability + Profitability - Cinemas - Branding + (MM) 8 oz ‘13 ‘17 *size of the bubble indicates volume PepsiCo Confidential 15 And gives us new opportunities to grow for Food Service Day Part Portfolio FACT #1 FACT #2 80%+ of business from Morning & Evening Huge Mix of CSDs for PepsiCo FACT #3 75% of industry sales is from foods 75% 76% 54% Breakfast Morning Snack Evening 73% Grow beyond morning & evening Grow beyond CSDs Grow beyond beverages PepsiCo Confidential 16 An example of how we can make the most of the channel opportunity… Differentiated portfolio based on Customized Pack Solutions that provide Lodging location/occasion within Lodging channel Travel convenience, portability, and competitive pricing • Drive Quaker Breakfast meal solutions Breakfast • 100% premium juice offerings CSD 150ml Cans Trop Tetra 200ml • Explore low-cost Water option In Room • Penetrate distribution on Salty Snacks and Quaker Cookies Water - Cups Lipton Fitness • Broaden Gatorade and G-Series trial Center • Introduce Premium Water brands Restaurant • Development of Pepsi Hi-Image contour bottle Lays Stax - Minis Quaker Cookies /Bar • Drive Mixology range – chef-led recipes and innovation • Gift Shop Introduce high end coolers to drive impulse purchase Peanuts/Snacks Quaker Inst. Oats Event • Represents up to 60% of total Beverage Catering sales Vending Solutions Source: US Travel & Lodging Fact book 2012 PepsiCo Confidential 17 The way to think about this opportunity: