PepsiCo India Forays Into Dairy Products With Oats-Based Milk Beverage

PepsiCo India on Friday forayed into the dairy segment with the launch of its ‘Oats + Milk' beverage, and has plans to launch more “nutrition-based” products in future.

“It is such an underdeveloped category – the consumption of packaged nutrition products…the opportunity is close to $50 billion, if we size it,” Deepika Warrier, vice-president-nutrition. PepsiCo India told BloombergQuint in an interview.

Admitting that PepsiCo's presence in the segment was limited, she said the company plans to expand its portfolio and offerings. Schreiber Dynamix, which currently produces its range of Tropicana juices, will also manufacture the dairy-based products, Warrier said, adding that exports of the same was not a priority for the company, given the potential they saw in India.

Sales of carbonated beverages have plateaued over the last few years, given a lifestyle shift towards fitness. India's soft drink industry witnessed a value growth of 11 percent compounded annual growth rate (CAGR), according to a report by research firm Nielsen, even as volumes grew only 5 percent during the period.

PepsiCo saw its net loss during 2016-17 widen to Rs 538 crore from Rs 177 crore in the previous financial year, according to information provided by the company to the Registrar of Companies.

Moving beyond its traditional stronghold – carbonated beverages – PepsiCo has launched several products in the ‘healthier' space, including offerings under the Quaker and Tropicana brands.

Speaking about competition from new entrants such as Patanjali Ayurved, Warrier said there was enough gap between packaged and unpackaged products in the country, and the big challenge for any company entering the segment was to drive consumption to the packaged segment.