OVERVIEW – PEPSICO

PepsiCo, Inc., American food and beverage company that is one of the largest in
the world, with products available in more than 200 countries. It took its name in
1965 when the Pepsi-Cola Company merged with Frito-Lay, Inc. The company’s
headquarters are in Purchase,

The PepsiCo entered India in 1989 and has grown to become one of the largest
MNC food and beverage business in India .PepsiCo India’s diverse portfolio
includes iconic brands like Pepsi, Lay’s ,Kurkure, Tropicana . Guiding PepsiCo
is our vision to be the Global Leader in Convenient Foods and Beverages by
winning with Purpose . we believe the continuously improving the product we
sell, operating responsibly to protect our planet and empowering people around
the world is what enables PepsiCo to run a successful global company that
creates long term value for society and shareholders.

HISTORY :

The recipe for Pepsi (the soft drink), was first developed in the 1880s by a
pharmacist and industrialist from New Bern, North Carolina, named Caleb
Bradham—who called it “Pepsi-Cola” in 1898. As the cola developed in
popularity, he created thePepsi-Cola Company in 1902 and registered a patent
for his recipe in 1903. The Pepsi-Cola Company was first incorporated in the
state of Delaware in 1919. The company went bankrupt in 1931 and on June 8
of that year, the trademark and syrup recipe were purchased by Charles Guth
who owned a syrup manufacturing business in Baltimore, Maryland. Guth was
also the president of Loft, Incorporated, a leading candy manufacturer, and he
used the company’s labs and chemists to reformulate the syrup. He further
contracted to stock the soda in Loft’s large chain of candy shops and restaurants,
which were known for their soda fountains, used Loft resources to promote
Pepsi, and moved the soda company to a location close by Loft’s own facilities
in New York City. In 1935, the shareholders of Loft sued Guth for his 91%
stake of Pepsi-Cola
Company in the landmark case Guth v. Loft Inc. Loft won the suit and on May
29, 1941 formally absorbed Pepsi into Loft, which was then re-branded as
PepsiCola Company that same year. (Loft restaurants and candy stores were
spun off
at this

time.) In the early 1960s, the company’s product lines expanded with the
creation of Diet Pepsi and purchase of Mountain Dew Origins .
COMPANY PROFILE :

Varun Beverages Ltd. is the world’s second largest franchisee (outside the
United States) of carbonated soft drinks and non-
carbonated

beverages sold under PepsiCo trademarks. The

Company also manufactures and distributes CSDs,
NCBs, and packaged drinking water. Varun Beverages’
operations are spread across six countries: three in the
Indian Subcontinent (India, Sri Lanka, and Nepal) and three in Africa (Morocco,
Zambia, and Zimbabwe).
Headquarters, Gurugram,

Varun Beverages has a 29-year strategic Haryana , India . relationship

with PepsiCo and accounts for more than 80% of PepsiCo’s beverage sales
volume in India. The Company has increased the number of PepsiCo licensed
territories and sub-territories, produced and distributed a wider range of PepsiCo
beverages, introduced new SKUs to its portfolio, expanded its distribution
network, and is now present in 27 states and seven territories.

Varun Beverages’ business model entails end-to-end execution responsibilities,

including everything from manufacturing, distribution, and warehousing to
customer management and in-market execution and managing cash flows and
future growth.

PepsiCo provides Varun Beverages with brands, concentrates, and ATL marketing
support before handing over complete control of the manufacturing and supply
chain processes, driving market share gains through BTL marketing, improving
cost efficiencies, and managing capital allocation strategies.

Varun Beverages obtains raw materials (PepsiCo concentrate and sugar/other

raw materials from approved suppliers), manages manufacturing, bottling, and
packaging at its production facilities, transports finished goods to warehouses in
trucks and deliver them to retail outlets via its extensive distribution network,
and in some cases directly. The products are kept in visi-coolers provided by
VBL and owned by the retailer.

Varun Beverages’ distribution network serves urban, semi-urban, and rural

markets, meeting the needs of a diverse range of customers. India’s distribution
network is strategically placed to maximize market penetration across licensed
sub-territories, emphasizing higher growth markets such as semi-urban and rural
sub-territories.

Apart from providing the concentrate, consumer marketing, and brands to Varun
Beverages, PepsiCo has complete control over the manufacturing and supply
chain processes, which drives market share and cost efficiencies.

The various PepsiCo brands manufactured and distributed by Varun

Beverages include Pepsi, Pepsi Black, Diet Pepsi, Pepsi Max, Mirinda Lemon,
Mirinda Orange, Mountain Dew, Mountain Dew Ice, Slice Fizzy, Seven-Up,
Seven-Up Nimbooz Masala Soda, Teem, Sting, Evervess, Tropicana Slice,
Tropicana Juices (100%, Delight and Essentials), Seven-Up Nimbooz,
Gatorade, as well as packaged

What are the key growth drivers of the Company?

Over the last few years, the Indian soft drink market has seen significant growth
as consumption in India has gradually improved, owing to a variety of factors
such as:
Favourable Demographic Profile: India is a young country, with people aged
15 to 64 accounting for most of the population, providing the country with a
large workforce to support economic growth. In India, soft drink consumption is
expected to increase due to changing population demographics, higher spending
capacity of young consumers, rapid urbanization, and growing rural
consumption.

Rapid Urbanization and Rising Income: With more than half of India’s
working-age population, disposable income has increased, resulting in a
significant shift in spending patterns. Furthermore, the positive trend of female
employment in India has resulted in higher family disposable income, which has
resulted in higher consumer spending.

Increased Average Spend Per Household: Over the last decade, there has
been a significant increase in the absolute average spend per household. Indian
consumers are increasing their discretionary spending on non-essentials such as
food, beverages, and consumer durables. Demand for carbonated soft drinks is
influenced by increased disposable income, consumer preferences, and a
growing population.

Electrification: With a good monsoon and better agro-economics, India’s rural

sentiment is expected to maintain a healthy momentum, bode well for the
country’s overall economic revival. Increased electrification of Indian villages,
combined with improved electricity supply quality, will aid in the penetration of
cooling infrastructure in these regions, thereby supporting industry growth.

Location: India has a hot tropical climate. Summer in most parts of India is
extremely hot and dry. It begins in April and lasts until the beginning of
October, with temperatures peaking in June. Because a large portion of the
population lives in hot and dry climates, soft drink consumption is likely to rise
in the foreseeable future.

DIFFERENT PRODUCTS OF PEPSICO

➢ Pepsi
➢ Diet Pepsi
➢ Slice
➢ Mirinda
➢ 7 up
➢ Mountain Dew
➢ Aquafina Mineral Water
➢ Leher Soda

Non-alcoholic soft drink beverage market can be divided into fruit drinks
and soft drinks. Soft drinks can be further divided into carbonated and
noncarbonated drinks. Cola, lemon and oranges are carbonated drinks while
mango drinks come under non-carbonated category. The soft drinks market till
early 1990s was in hands of domestic players like campa, thumps up, Limca etc
but with opening upof economy and coming of MNC players Pepsi and Coke
the market has cometotally under their control. While worldwide Coke is the
leader in carbonateddrinks market in India it is Pepsi which scores over Coke
but this difference is fastdecreasing (courtesy huge ad-spending by both the
players). Pepsi entered Indianmarket in 1991 coke re-entered (After they were
thrown out in 1977, by the thencentral government) in 1993.Carbonated soft
drinks major Pepsi India is now putting together a ‘cocktail’ totake a bigger
‘slice’ of the fruit juice market. Close on the heels of the launch of itsglobal
lemon drink Twist in an Indian avatar as Pepsi Aha, Pepsi, once again, is allset
to roll out another global product in a localized version. Come June 2002,
andPepsi will roll out the blends of its international fruit drink Twister in the
country,albeit, with a difference. In India, Twister blends will be launched as
mixed fruitcocktails under Pepsi’s existing juice brand Slice. Pepsi
spokesperson, whencontacted, confirmed the launch but said the products will
be launched on an‘experimental basis’ for three to four months beginning June
2002. However,confirmed sources said that the product has been test-launched
and is ready for aformal launch in June. Globally, the proposed Slice fruit
blends exist under Twisterbrand and are available in over 10 flavors and in
various packaging options.However, in India, while the blends will be decided
as per local tastes and as perthe availability of fruit pulp, packaging will be
restricted to cartons only. Amongthe four to five flavors planned, strawberry-
peach and kiwi-guava are some of them. However, the new product could be
priced a little higher than Slice since Twister originally is believed to have more
than 15 % juice conten.
 PRODUCTS OPERATION AND TECHNOLOGY :

Nonalcoholic beverages include sodas (carbonated soft drinks, or CSD), bottled

waters, juices, and a large variety of mixtures. Sodas account for about 60
percent of the market. The manufacture and distribution of most national soda
brands, including Coke and Pepsi, is a two-tiered process. The primary
manufacturer produces a flavored syrup called concentrate that is sold to local
bottlers who manufacture and distribute the finished product. In a typical
bottling operation, the flavored syrup, corn syrup (sugar), and filtered water are
mixed in appropriateproportions, carbon dioxide gas is injected, and the finished
soda product is pouredinto bottles or cans, which are capped, labeled, and
packaged.The two-tiered structure is most efficient for national companies with
large volume, because the manufacturing process is simple and because the
water main ingredient is sodas. Companies combine the syrup production and
bottling operations in one plant. For soft drink bottlers, the major raw materials,
aside from the flavored syrup, are corn syrup and containers -- glass bottles,
aluminum cans, or plastic bottles made from polyethylene terephthalate
(PET).Bottlers frequently operate sizable distribution systems, including
warehouses and fleets of specialized delivery trucks. Production and distribution
volume is usually measured in cases of 192 ounces, although actual cases of 12-
ounce cans now contain 288 ounces. Coca-Cola produces more than 4 billion
cases of soft drinks per year PepsiCo, over 3 billion. In addition to producing
canned and bottled soft drinks, large manufacturers sell sweetened syrups to
restaurants and other retailers that produce the finished product at the point of
sale by mixing the syrup with carbonated water to produce fountain product.
 DISTRIBUTION NETWORK

VBL has a wide and well managed network of salesman appointed fortaking up
the responsibility of distribution o product . the distribution channels are
constructed in such a way that the demands of the customers is fullfilled at the
right place and the right time when it is needed by them . A typical distribution
chain at VBL would be;

Production---- Plant ware house ----Depot warehouse---Distribution

warehouse----Retail stock----Retail shelf---- Consumer

The customers of the company are divided into different categories and different
routes , and every salesman is assigned to one particular route which is to be
followed by him on a daily basis. A detailed and well organized distribution
system contributes to the efficiency of the salesman. It also leads to low cost
higher sales and higher efficiency thereby leading to higher profits to the firm.
 OBJECTIVES OF INDUSTRAL VISIT TO PEPSICO
The Objective of his visit is to view and acknowledge the various
functionalities of the company.

• The VBL plant was very neat and clean layout. With almost all the
process automated
• I had a fully functional view of the plant working and producing PepsiCo
‘s most popular brands like , Pepsi , Mirinda , 7 Up , Mountain Dew ,
Slice , Sting , Aquafina mineral water.
• The complete manufacturing process from cleaning the bottled to coding
the final product was well explained by Quality Executive.
• Limited and optimally productie usage of manpower was reported at the
plant. Every employee was clear about their duties and daily activity
schedules.

On a whole it was a exemplary learning experience that will savor or a

long time to come.