Food and beverages: Pakistan among PepsiCo’s top 10 non-US markets

Published: January 13, 2013

Strong growth: Rs82b is the revenues of PepsiCo Pakistan and its eight bottlers for the financial year ending June 30, 2012, according to sources. ILLUSTRATION: JAMAL KHURSHID

LAHORE: 

Pakistan is one of the top 10 markets outside the United States for PepsiCo, says Qasim Khan, a senior executive in the global food and beverage giant’s management team for Asia.

“Pakistan is one of the largest and fastest growing markets for PepsiCo around the world,” said Khan, the Rawalpindi-born head of PepsiCo’s North and South Asia business unit. His division covers Japan, South Korea, Thailand, Indonesia, the Philippines, Malaysia, Singapore, Pakistan, Mongolia, and the island states in the Pacific Ocean.

Somewhat surprisingly for PepsiCo, its biggest brand in Pakistan is not the signature Pepsi cola, but rather Mountain Dew. “Pakistan is the second-largest market in the world for Mountain Dew after the United States,” said Muhammad Khosa, head of corporate affairs at PepsiCo Pakistan.

Pepsi began its operations in Pakistan with carbonated beverages in 1967, and currently has eight bottling franchisees operating throughout the country. In addition to Pepsi and Mountain Dew, they produce 7up and Mirinda in the carbonated beverage category, and Sting in the energy drink segment. Over the past decade, Pepsi has added snack foods and fruit juices to its portfolio of products in Pakistan, which it manufactures primarily out of a factory in Lahore.

The addition of the snack food business – as well as strong growth in its beverage lines – has resulted in PepsiCo becoming the largest food and beverage company in Pakistan. According to sources familiar with the matter, the revenues of PepsiCo Pakistan and its eight bottlers came to a combined Rs82 billion for the financial year ending June 30, 2012, up 19% compared to the previous year.

Growth seems to be moving at breakneck speed in the snack food business, which the company started in 2006. “The Pakistan snack food business was the fastest growing in the Asia Pacific region for PepsiCo last year,” said Khan.

Indeed, growth was so fast that the company’s manufacturing plant for snacks reached its peak production capacity within its first year of operations. The company had initially estimated that it would be able to handle at least three years’ growth: it is now scrambling to add capacity as quickly as possible.

Pakistan’s growing importance for PepsiCo is increasingly being reflected in different ways. A television commercial produced in Pakistan for Mountain Dew is now used worldwide. Pakistani technical staff members are occasionally sent to PepsiCo’s divisions around the world to train others. And the PepsiCo food laboratory in Lahore is now used as one of the main labs for products being tested for the Middle East and Africa.

The company’s business unit, under which Pakistan falls, is headed by Qasim Khan, a 1979 graduate of Hailey College in Lahore. After a brief stint at Procter & Gamble, Khan joined PepsiCo in 1986 and has been with the company ever since; serving in senior positions throughout the world.

But Khan is not even the highest-ranking Pakistani at the company. The company’s global chief scientific officer and chief marketing officer are both Pakistanis.

PepsiCo and its bottlers combined have over 15,000 employees in Pakistan. And it is among the highest taxpaying entities in the country.

Yet not everything is going well for PepsiCo in Pakistan. The natural gas shortage has meant that gas supply to its captive power generation unit at its manufacturing facility has been cut off, forcing it towards alternative, and more expensive, fuel sources. “The cost savings we had managed in our logistics operations were wiped out by higher energy costs,” said Khan.

Nonetheless, the company plans to continue growing its operations in Pakistan and make it part of the global supply chain. Kurkure, spicy corn-based snack currently available only in India and Pakistan, will soon be exported to Malaysia, Indonesia and Singapore from Pakistan, owing to the fact that the chips produced in Pakistan are already certified ‘halal’.

Published in The Express Tribune, January 13th, 2013.

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Reader Comments (22)

  • Mika
    Jan 13, 2013 - 7:28AM

    It should be a cause for concern since High Fructose Corn Syrup inside those is known to cause obesity and other related illnesses.

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  • rish
    Jan 13, 2013 - 7:39AM

    i wish same revenue should be earned by pakola pakistan :(

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  • The more deluded
    Jan 13, 2013 - 8:21AM

    Mountain Dew? Ugh… as if Pakistan’s image wasn’t bad enough.

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  • Jan 13, 2013 - 8:43AM

    Some worry about rising carbonated drink consumption in South Asia. I think these worries are overblown considering the fact that per capita consumption in Pakistan is just 5 liters and in India 3 liters.

    Compare this with milk, a healthier alternative, whose consumption in Pakistan is 223 Kg per person and 96 Kg in India.

    http://www.riazhaq.com/2012/10/pakistan-among-top-meat-consuming.html

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  • Hassaan
    Jan 13, 2013 - 9:10AM

    WOW. That’s quite a news.

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  • sensible
    Jan 13, 2013 - 9:52AM

    Pakistani people traditionally love sweets especially Punjabi’s so its not surprising that they love mtn.Dew cuz of its sweetish taste that it also has more concentration of caffeine than pepsi also i think cuz it also has more concentration of caffeine than Pepsi that makes you active and feel calm.

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  • sindhi
    Jan 13, 2013 - 10:37AM

    while writer has done a good job glorifying this company but the fact of the matter is pepsi is struggling in rest of the world because people are getting health conscious and avoiding sugary drinks and calorie rich but nutrition less snacks. unfortunately because of kind of products they offer in Pakistan what is good for the pepsi is not good for the nation.

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  • ManofSteel!
    Jan 13, 2013 - 11:34AM

    Pakistan ruling PEPSI all over! though i still think Coca Cola tastes better :)

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  • Suheil Siddiqi
    Jan 13, 2013 - 11:38AM

    Does Pepsi contain Aspartame?

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  • Jan 13, 2013 - 12:09PM

    Yes, Pepsi products are very popular in Pakistan as compared to other beverages including Coke.

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  • Ali Abbasi
    Jan 13, 2013 - 12:32PM

    Good to know there is a positive aspect to business in Pakistan, But Pepsi n related food is never healthy.

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  • ahmed
    Jan 13, 2013 - 3:18PM

    Riaz Haq, if your figures are correct than India in not so shinning i guess

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  • Tilopa
    Jan 13, 2013 - 5:23PM

    And the man rumoured to be the probable successor to current CEO Indra Nooyi is also a Pakistani.

    Bust!
    Indra nooyi is not a man but woman. She is a hindu Indian-American and not a pakistani.
    Tribune you got it all wrong.

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  • sanwal
    Jan 13, 2013 - 6:38PM

    Indra Nooyi is not Pakistani, She is Indian-American. Tribune check your articles for accuracy before publishing.

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  • aj
    Jan 13, 2013 - 7:46PM

    @Ali Imran:
    coke is also very popular

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  • Free
    Jan 13, 2013 - 8:52PM

    @sanwal:
    it says probable successor man to Indra Noori is Pakistani…Read Facts correctly first!!

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  • Jan 13, 2013 - 9:14PM

    @sanwal: “Indra Nooyi is not Pakistani, She is Indian-American. Tribune check your articles for accuracy before publishing.”

    I think it’s you who has a basic reading comprehension deficit. Not a surprise given the poor state of Indian education as reflected in very poor performance on standardized tests like PISA and TIMSS.

    http://www.riazhaq.com/2011/12/pisa-timss-confirm-low-quality-of.html

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  • Asif
    Jan 13, 2013 - 11:13PM

    Diabetes is epidemic here in Pakistan do we need to further fuel this disease so that it blows out of proportion?

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  • Pakistani from UAE
    Jan 14, 2013 - 12:09AM

    @ Tilopa and Sanwal: Check your comprehension skills.. They are talking about the sucessor of Indra Nooyi being a amn.. not her.. I wonder why would you comment and get embarassed..

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  • Abdul Mannan Khan
    Jan 14, 2013 - 10:19PM

    “A television commercial produced in Pakistan for Mountain Dew is now used worldwide”. I didn’t find any Mountain Dew commercial produced in Pakistan, all Dew commercials are foreign production.

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  • KHAN
    Jan 15, 2013 - 3:21AM

    STAY AWAY FROM THIS JUNK FOOD. QASIM KHAN SHOULD BE JAILED FOR SELLING POISON IN PAKISTAN.

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  • Aiman
    Jan 16, 2013 - 11:24AM

    @Abdul Mannan Khan:

    Actually Interflow Pakistan has produced 3 commercials for Mountain Dew using foreign talent and foreign locations. The first one is the Kung Fu commercial, the second was the tornado commercial and the third was the Bull in the arena commercial. The reason for this strategy was that research over the years indicated that people enjoyed the internationalism of the brand.

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