Processing Magazine

PepsiCo not worried by U.S crisis, ups India investment

September 22, 2008

PepsiCo Inc. does not expect the U.S. financial crisis to hit its business and will invest an additional $500 million in India over the next three years as part of its focus on fast-growing emerging markets, according to Reuters. High commodity prices and global inflation remain a worry for the maker of Pepsi-Cola, Frito-Lay snacks and Quaker Oatmeal and could weigh on margins in the short-term. Soaring commodity prices have put pressure on food and beverage makers. Pepsi and its rival Coca-Cola Co. increasingly rely on developing markets like China, India and Russia for growth, as North American sales of traditional soft drinks like colas have slowed amid a growing consumer emphasis on health and an economic slowdown. PepsiCo derives 40 percent of its revenue from outside its home country. Emerging markets contribute to 60 percent of growth of the international business. PepsiCo, which entered India in 1989, has invested more than $700 million in the country so far and expects its revenue from the country to triple in five years.