w o r k i n t h e a d v e r t i s e m e n t s b u t t h e y a l s o h a v e t o u s e t h e PepsiCo entered India in 1989 and has grown to become one of the country’s leading food and beverage

companies. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. Our goal is to nourish consumers with a range of products that deliver great taste, convenience and affordability from simple treats to healthy offerings. PRODUCTS FOOD PepsiCo's foods division Frito-Lay is the leader in the branded salty snack market and all it's products are free of trans-fat and MSG. It manufactures Lay ’ s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The company ’ s high fibre breakfast cereal, Quaker Oats and low fat and roasted snack options like Aliva enhance the healthful choices available to consumers. BEVERAGE PepsiCo India's expansive portfolio includes iconic refreshment beverages such as Pepsi, 7UP, Nimbooz, Mirinda, Slice and Mountain Dew; in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100%, Tropicana Twister fruit juices.

PROJECT REPORT ON “ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO” RURAL VS. URBAN MARKET Coca-Cola Company is one of the first global majors to have spotted the potential spin offs from the country’s rural market. Population of Rural sector is more conscious more about the price whereas Population of Urban sector is more conscious about the quality and brand name of the product. so Coca cola and Pepsi Co in Year 2002 bring the 200 ml bottle at Rs.5 specifically targeted at the rural sector so that soft drink can take place of the local drink like lemon, sugarcane juice and Tea etc. Both the companies Coca-Cola and Pepsi Co have adopted different marketing strategy for rural and urban areas 3.2.2

3.2.2 DEMOGRAPHIC SEGMENTATION AGE India is considered to be a young country i.e. average age of Indian population is less 38years. Thus targeting young generation can be a beneficial marketing strategy for soft drink companies. In fact this is the case, all the major brands like Pepsi, coca cola, and thumps up, mainly target younger generation in India. In Europe, as average population is older than Asian countries, Coca cola targeted the older generation of the population. Similarly in USA, Pepsi targeted the generation X (younger generation) as they comprises majority of the population and they positioned Pepsi in the mind of youth that Pepsi is for the youth 3 GENDER
Gender based segmentation is very important. As taste of male and female is different. Let’s take the example of coca cola, thumps up is promoted as masculine soft drinks while coca cola and Fanta are having light taste and mainly targeted for loving birds, ladies, and children. Same example is available in Pepsi, mirinda’ orange flavor is popular among ladies, girls, and children

PRODUCT MIX A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations,information, and ideas. If we take the example of soft drink industry, then these companies not only sell soft drinks in physical forms, but brands. A brand comprises of everything from beverages to experiences. However in this chapter we shall try to understand and analyze the product line and product classification of Pepsi and coca cola.

pepsi Pepsi has been bringing fun and refreshment to consumers for over 100 years. From its humble beginnings over a century ago, Pepsi-Cola has grown

to become one of the best-known, most-loved products throughout the world. Today, the company continues to innovate, creating new products, new flavors and new packages in varying shapes and sizes to meet the growing demand for convenience and healthier choices.

Target Marketing
1. Undifferentiated Marketing: - It is a standardization strategy option, where the firm offers the same product, uses the same advertising, promotional, distribution, publicity, public relations and pricing strategies to different market segment. E.g.: - Pepsi and Coca-Cola.

THE SOFT DRINK MARKET: The soft drink markets can be segmented on the basis of place of consumption or on the basis of type of products. The segmentation on the basis of place of consumption divides the market into two parts: • On-premise-80% of the consumption of soft drinks is on premise i.e. restaurants, railways stations, cinema etc. • At-home- the rest 20% of the market compromises of the soft drink purchased for consumption at home. The market can also be segmented on the basis of types of products into cola products and non-cola products. • Cola products account for nearly 61-62% of the total soft drinks market. The brands that fall in this category are Pepsi, Coca-Cola, Thumps Up, and diet coke, Diet Pepsi etc. • Non-cola segment which constitutes 36% can be divided into 4 categories based on the types of flavors available, namely: o Orange o Cloudy Lime o Clear Lime o Mango i. Orange flavor based soft drinks constitute around 17% of the market. The segment is largely dominated by national brands like Fanta of Coca Cola and Mirinda Orange of PepsiCo, which collectively form15% of the market rest of the market is in hands of smaller brands like Crush (earlier of Cadbury Schweppes and now of coca Cola), Gold Spot etc.

ii. Cloudy Lime flavor constitutes 14% of the market and is largely dominated by Limca of coca cola and Mirinda Lemon of PepsiCo. Limca is the market leader with around 70-75% of the market followed by Mirinda Lemon. iii. Clear Lime: this segment of the market witnessed good growth initially with all the players launching their brands in the segment. But now the growth in the segment has slowed down. The brands available in this segment are 7 Up of Pepsi, Sprite of Coca Cola and Canada Dry (earlier of Cadbury Schweppes and now of Coca cola). The segment constitutes 3% of the total soft drinks market. iv. Mango: this flavor segment constitutes 2% of the total soft drinks market and it directly competes with mango based fruit drinks like Frooti. The leading brands in this segment are: Maaza of Coca Cola, Mangola (Earlier of Dukes now of PepsiCo) and Slice of PepsiCo. There is very thin line of difference between the clear and cloudy lime. The most obvious feature is that clear lime has to be bottled in green bottles as sunlight harms the drink and changes the taste. There are some small local brand sat city or regional levels. Most of these are either merging with the two big players (Coca-Cola and Pepsi) or they command a very small – less than 3%, of the total market in their respective areas.


Product: A business needs to consider the products that it produces and the stage of the product life cycle that a product is at. Marketing strategies will vary according to the type of product and its stage in the life cycle. In case of Pepsi, in the rural markets, the 300ml bottle and now days the new small or commonly known as the “chota pepsi” is very much popular. The Pepsi Co. is even thinking of introducing their new Pepsi-Aha, but presently they are concentrating more on the normal pepsi as the rural market is a niche market. Pepsi is even successful in introducing the big 11.5 liter PET bottles in the rural markets. These big bottles are very popular during big festivals and marriages.

Price: Most businesses use a "cost plus" method for setting the prices of their products. This involves determining unit production costs and then adding in a profit margin. However, many other factors are involved. Consider "perceived price" (what you think consumers will be

prepared to pay), demand elasticity (is it elastic or inelastic?), competitors' pricing (can you afford to undercut their prices?), pricing objectives (what do you want to achieve Ð increased market share? increased profits? market leadership? etc.) Example 2 Perfume ? How much does it cost to make? ? Can businesses afford a "price war"? ? Why is Coca Cola so successful?

As far as the pricing goes, the 300 ml Pepsi bottle is priced at Rs. 10 now it is 12. But the company soon realized that this pricing worked in the urban markets but not in the rural markets as in the rural markets, Pepsi is not a necessity but a luxury. They found out that people in the rural markets bought cold drinks only if there was some occasion. A price point of Rs 10 for a 300 ml bottle has proved a major deterrent: it has kept away new consumers in the urban and semi-urban pockets, and it has blanked out the far larger rural markets where annual per capita consumption is less than a bottle. So the Rs. 10 bottle was not that successful. But their sales increased after introducing the “chota Pepsi”. This 200ml Pepsi was reasonably priced between Rs.5- Rs.7. This was a major weapon for the expansion of the rural market. Pepsi expects the small-size offering to account for 30 per cent of volumes this year compared with 18 per cent last year. But there are other areas of concern — principally that the 200 ml offering should not cannibalize 300 ml sales. In that case, there will be no market growth. That is why pricing could be crucial. Pepsi, for instance, has reckoned that giving consumers 33 per cent (100 ml) less cola at 50 per cent of the price (Rs 5) is not a sustainable option and can, at best, be used as an introductory offer.

The conclusion is based on hard facts. Last year, the beverage giants test-marketed 200 ml bottles at a price of Rs 5. Instead of growth, Pepsi discovered that 300 ml drinkers merely shifted to the 200 ml variant, the market remained stagnant and everyone lost money. The conclusion was clear: cutting prices does not necessarily expand the market.



It was hot summer of Chennai which made me realize of this unique pricing strategy of Cola Companies. Few days back while quenching my thirst in a local cola shop in Chennai, I discovered how these Cola companies have strategically shift there pricing by selling 200ml of soft-drink at the cost of 300ml. I had to quench my thirst by consuming 2 bottles huhhh!! It was few years back when these companies come up with the concept of “Chota Pepsi” or “Coke” for that matter. They offered consumers 150 ml of softdrink for Rs.5. It was well accepted by consumers who were use to drink 300 ml. At this point of time both 150 ml and 300 ml (for Rs. 9) were available in the market. Then after some time they increased the volume and price of small bottles to 200 ml and Rs. 7, though 300 ml was at same price. These companies discovered a new trend in consumers. They realized that still consumers prefer small bottles. This appeared as a great opportunity for them. Bingo!! The result of this we are seeing now.

Finally, these companies are now selling same “Chota Pepsi” or “Small Coke” at the price of “Bada” i.e. Rs. 9. And we without realizing this have happily accepted this. And the price of pet jar i.e. 500 ml has just increased from Rs. 18 to Rs. 20, where as the prices of 1.5 liters and 2 liters have been decreasing or is mostly with some offer like free my can or something. 300 ml bottles have almost vanished from the market now. Hats Off to the pricing strategy of the Cola Companies who have been successfully able to sell 66% of the product at the cost of 100% almost in a phased manner and making consumer habitual and unaware of the increased price.)
Place This generally refers to the physical locations of product sales as well as the methods of distribution. However, it is also considered to be the "place" or "position" in the market of the product; refer to information below. Businesses need to make many decisions related to "place": access, parking, competition, physical location etc. It’s the most important P in the cola wars — Place. And nothing evokes more passion in Pepsi and Coke than distribution. Major innovation is underway on the distribution front at Pepsi, pre-selling being the biggest of all. It’s been successfully test marketed in Bangalore, Baroda and Coimbatore — and may soon roll out nationally. In case of the distribution network, there is no involvement of wholesalers in the distribution of products. It is more like an agent network. The companies have divided the country into various regions and established a franchisee in each region. The franchisees have their own bottling plants and manage all the day-to-day operations. However, of late, the soft drinks companies have started setting up company owned bottling units have been acquiring some of its franchise bottles. In the current system, the strike rate in the Delhi market is about 40 per cent, which can be improved to 80 per cent in the peak season, claims a franchise director. The result for Pepsi could be significant

savings. “Colas service just 7.5-8 lakh accounts compared to the other FMCG players who service three times the number. Innovation in our distribution system will take us closer to the 21 lakh figure,” says Vats, a franchise director. Pepsi believes in direct distribution whereas Coke doesn’t. It mainly concentrates on

dealers and most importantly cutting costs. “There are plenty of innovations possible in distribution that can cut costs”, says a Pepsi official.

For Pepsi, the rural market is a chosen thrust this year. It has targeted to reach 20 to 28 per cent of the rural population in the first year of this operation. In the first stage, the corporation is planning a massive roll out in villages with populations of 5000. To do this effectively, Pepsi is focusing on establishing a cold chain. The company has developed special freezers that allow its products to stay chilled despite power cuts of three to four hours. It will also use traditional iceboxes to sell its product in rural India. For the rural markets, Pepsi is looking at the wholesale route since the logistics of direct distribution are too huge to handle in the interiors.

Promotion This refers to the promotion of the product to the target market. This is achieved through a combination of: advertising: use of electronic and print media. The "reach" (how many people will see the advert), frequency (how many times will I advertise the product?) and impact of the advertising must also be evaluated. Personal selling: what happens in the "shop", contact between sales people and consumers or customers. Sales promotion: use of gimmicks and incentives e.g. competitions.

Sponsorship and promotional licensing: including specific products sold under license that promotes the business (e.g. football jumpers). Publicity or public relations: "adversarial" in local papers or special promotional materials. Due to the cola wars promotion, and advertising has always been an integral part for both the cola cos: Pepsi and Coke. But for the first time perhaps in the history of cola wars, the strategies of the two giant cos are diverging in India. Whether it’s business or product strategies or the critical distribution game plan, the archrivals are taking roads that do not meet. Mr. Bakshi of Pepsi Co. is bringing a change in their distribution and marketing strategies. Now days where Coke is concentrating more on the 200ml bottle, Mr. Bakshi of Pepsi says “The 200ml bottle gets zero demand in the rural market.” He is concentrating on the 1.0 liter bottles of Pepsi. The Pepsi Co. had used an excellent marketing strategy here. During the Lagaan mania they were distributing free tickets in the rural markets along with

their 1.5-liter PET bottles. Pepsi made this 1.5-liter PET bottle very famous for their special festive occasions and marriage. Well the popularity of the product has also increased due to their advertisements or basically famous cricket and bollywood personalities endorsing this product. For instance the Sachin “Aala re Aala” advertisement where even he is wearing a mask along with those rural kids. Or you can even take the new Sachin and Amitabh Bachchan advertisement where both of them say “ Yeh Dil Maange More!!!!!!!” Sachin has done many advertisements for Pepsi in the span of 10 years. Pepsi’s rural market advertisement- Pepsi has unveiled a major campaign in Andhra Pradesh, roping in top Telugu film star, Pawan Kalyan, even as the star's elder brother, Chiranjeevi, is into pushing Coca-Cola's Thums Up. Pawan Kalyan, however, ruled out any rivalry between him and his brother. Though he will sing Yeh Dil Maange more, his brother will say Yeh Dil Maange no more. “We have our lives and we have our own choices,” he said on the possible in-house cola feud. Pepsi also kicked off a rural campaign, spread over two months. Decorated Pepsi vans will roll out into market of the State. Every consumer drinking a Pepsi from these vans will get to play a game and win prizes. These include Pawan Kalyan memorabilia, T-shirts, autographed posters and calendars. Explaining the reason for choosing Pawan Kalyan to endorse Pepsi, Mr. Rohit Ohri, Director HTA, Pepsi's ad agency, said Pepsi and Pawan Kalyan were going to be an ideal combination. “Both are so youthful, energetic and fun-loving,” he said. Mr. Vijay Shanker Subramaniam, Vice-President (Marketing), Pepsi Foods Ltd, said the company was starting an “aggressive campaign” in Andhra Pradesh. Apart from the van operations, which were flagged off by Pawan Kalyan, other campaigns have been lined up throughout the year. Later, Pawan Kalyan presented a cheque for Rs 5 lakh to Mr. Mehmood Ali, a mechanic with the Andhra Pradesh State Road Transport Corporation for winning Pepsi's Mera number ayega campaign. Lastly, we all know that though Coke ranks 1st with 57 % of the market share (which includes Thums –up too), Pepsi ranks 2nd with 43% of the market share. The Pepsi Co. has fought a bitter struggle upwards starting from a zero market share. When Pepsi entered the market in 1989, they faced the daunting task of pacifying Indian swadeshi activists alone. Their trucks were smashed and offices ransacked so as to dissuade them from entering the Indian market. Whereas when Coke entered (or re-entered) the Indian market in 1993, the situation had been smoothed out by Pepsi already, and the atmosphere was extremely conducive to foreign multinationals coming to India. Therefore, though Coke ranks 1st, it got this position only after introducing the Parle products who already had a 70% market share at that point of time. Presently Pepsi Co. is also concentrating on its other products like slice, mirinda and aquafina. Their next aim is to popularize their other products like sodas, then the new Pepsi Aha- the apple drink and beat coke to become the new market leader.


1. PepsiCo should Promote their all products like Alvio, Gatorade and Quaker Oats 2. PepsiCo should promote their product in Rural area also as Coca-cola is doing. 3. PepsiCo should expand the Brand Image of Pepsi (People are only correlating it with youth- Youngistan) 4. As Coca- Cola shows its logo at the end of every advertisement of its each product/Brands, so Pepsi should also show its logo in its each Brands advertisement 5. PepsiCo also should go equally to other medium of advertisement like pepper, hording and internet. 6. PepsiCo should also continuous participate in Sporting events. 7. PepsiCo can take part in IPL also 8. PepsiCo should also focus on Green marketing like other companies doing like- Idea, Aircel etc. 9. PepsiCo mostly Brand ambassador came from bollywood so they should focus on Sporting celebrity like from cricket, football and hockey
10) People are not that much aware about some products of PepsiCo so they should focus on it. 11) The regular user of Pepsi is very low. So Pepsi have to convert those customer which are aware about Pepsi but not using it regularly, so try to make them brand loyal 12) Buying priority of most customers is refreshment so they should try to convert them in brand preference. 13) They should more target on Child and Sports men 14) They should show Quality and Trust base in their advertisement. 15) PepsiCo should focus on their brand ambassador they are changing it continues so they should take care of it

Price In economics and business, the price is the assigned numerical monetary value of a good, service or asset. Price is also central to marketing where it is one of the four variables in the marketing mix that business people use to develop a marketing plan. Pricing is a big part of the marketing mix. Choosing the right price and the right pricing strategy is crucial to the marketing process. The price of the product is not something that is fixed. On the other hand the price of the product depends on many other factors. Some times the price of the

product has got nothing to do with the actual product itself. The price may act as a way to attract target The price of the product is decided keeping many things in mind. These things include factors like cost incurred on the product, target market, competitors, consumer buying capacity etc.

Pepsi – Price
Pepsi again decides it price on the basis of competition. The best think about the company Pepsi is that it is very flexible and it can come down with the price very quickly. The company is renowned to bring the price down even up to half if needed. But this risk taking attitude has also earned Pepsi losses. Though lowering the price would attract the customers but it would not help them cover up the cost incurred in production hence causing them losses. This was the situation earlier but now Pepsi is a fullfledged and growing company. It has covered all its losses and is now growing at a rapid rate.

Place is a term that has a variety of meanings in a dictionary sense,but which is principally used in a geographic sense as a noun to denote location, though in a sense of a location identified with that which is located there. In marketing, place refers to one of the 4 P's, defined as "the marketplace". It can mean a geographic

location, an industry, a group of people (a segment) to whom a company wants to sell its products or services, such as young professional women (e.g. for selling cosmetics) or middle-aged family men (e.g. for selling family cars). Pepsi – Place Pepsi again has spread worldwide. Pepsi when entering a new market does not go in alone but it looks for partners and mergers. Till now Pepsi has collaborated with companies like Quaker Oats,Fritolays, Lipton, Starbucks, etc. Pepsi like Coke has spread all over the world. It is because of this worldwide spread that now it is coming up with Advertisements which can be broad casted in the different nations in the world. The recent example with would be the Pepsi advertisements having DavidBeckham as it brand ambassador

Promotion is one of the four aspects of marketing. Promotion comprises four subcategories: 1. Advertising 2.Personal selling 3. Sales promotion 4.Publicity and public relations The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of

objectives, including: sales increases, new product acceptance,creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Both the companies Pepsi and coke are famous for their promotions. The rivalry was first started when Pepsi started with its blind taste tests known as the Pepsi Challenge. The challenge is designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are identical drinks, with no meaningful differences. The challenge stakes the form of the taste test.
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In blind taste tests, more consumers prefer the taste of Pepsi to that of Coca-Cola. Because Coke was the historical leader, more people expected that they'd prefer and select Coke. Their surprise at picking Pepsi in the blind taste test (products were served in unmarked cups) helped change their minds about which product they prefer. Capturing this on film, Pepsi turned this into a memorable TV campaign that lasted many years. Also ad-campaigns are put up on the television by both the players. The following statistic just tells of much of share of ads on TV are captured by these players. I

Nowadays both Coke and Pepsi are going in for Brand Ambassadors to promote their product. These brand ambassadors are famous people who usually people idolize and people can relate to them. The following pictures do not need any explanation as people are familiar with the celebrities and can thus quickly identify with the product. A lis

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Geographic Geographic Region

Region  India, Urban and Rural India, Urban andRural Climate Climate  Hot and dry Hot and dry Target area Target area  Domestic users, Domestic users, Restaurants, Bars, School and College Restaurants, Bars, School and College canteens

Geographic Region Region  India, Urban and Rural India, Urban andRural Climate Climate  Hot and dry Hot and dry Target area Target area  Domestic users, Domestic users, Restaurants, Bars, School and College Restaurants, Bars, School and College canteens

Geographic Region Region  India, Urban and Rural India, Urban andRural Climate

Climate  Hot and dry Hot and dry Target area Target area  Domestic users, Domestic users, Restaurants, Bars, School and College Restaurants, Bars, School and College canteens

PepsiCo established its business operations in India

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PepsiCo established its business operations in PepsiCo established its business operations in India in the year 1989 in the year 1989 Pepsi has grown to become one of the countrys Pepsi has grown to become one of the countrys leading food & beverage companies leading food & beverage companies PepsiCo has invested more than USD 1 billion in PepsiCo has invested more than USD 1 billion in India since its establishment India since its establishment PepsiCo has a diverse range of products from Tasty PepsiCo has a diverse range of products from Tasty Treats to Healthy Eats Treats to Healthy Eats It provides direct and indirect employment to It provides direct and indirect employment to 150,000 people in India India in the year 1989 in the year 1989 Pepsi has grown to become one of the countrys Pepsi has grown to become one of the countrys leading food & beverage companies leading food & beverage companies PepsiCo has invested more than USD 1 billion in PepsiCo has invested more than USD 1 billion in India since its establishment India since its establishment PepsiCo has a diverse range of products from Tasty PepsiCo has a diverse range of products from Tasty

Treats to Healthy Eats Treats to Healthy Eats It provides direct and indirect employment to It provides direct and indirect employment to 150,000 people in India