PepsiCo is an American multinational food, snack, and beverage corporation formed in 1965 from the merger of Pepsi-Cola Company and Frito-Lay, Inc. It has a presence in over 200 countries and territories. PepsiCo engages in reverse innovation by developing products in emerging markets and then adapting them for developed markets. Notable examples include Gatorade, which originated from a drink developed in Bangladesh to treat diarrhea, and Tata Nano, an inexpensive car launched in India and later adapted for European markets. PepsiCo has seen success through reverse innovation strategies focused on local tastes and emerging market needs.

2. Introduction and History of PepsiCo
• American food and beverage company
• Formed in 1965 with the merger of the Pepsi-Cola Company and
Frito-Lay, Inc.
• 3rd leading company in this sector
• Presence in 200+ countries
• Revenue: $ 63,525 billions (2017)
• Chairman : Indra Nooyi
• CEO: Ramon Laguarta
Indra Nooyi

3. Known Mergers and Acquisitions
1965 Merger with Frito-Lay to form PepsiCo
1967 Frito-Lay introduces Doritos tortilla chips in
U.S.
1977 PepsiCo acquires Taco Bell
1978 PepsiCo acquires Pizza Hut
1986 PepsiCo acquires KFC
1997 Taco Bell, Pizza Hut, and KFC are spun off into
a new company called Tricon Global
Restaurants.
1998 PepsiCo acquires Tropicana Products for $3.3
billion.
2000 PepsiCo acquire the Quaker Oats Company
for $13.4 billion.
2008 Bought Lebedyansky Water
2009 Acquired Amacoco, Brazilian largest coconut
water company.

4. Innovation and Strategy

5. • Didn’t restrict its focus to beverages only
• Innovating their packaging technologies
• Innovative vending machines
• Innovative Marketing and promotional strategies

6. Organisational Structure
1986PepsiCo
Worldwide
Beverages
PepsiCo
Worldwide Food
1996
Pepsi-Cola
Company
Frito-Lay
Company
2002
PepsiCo
Beverages and
Foods North
America
PepsiCo
International (PI)
2007
PepsiCo
American Foods
PepsiCo
American
Beverages
PepsiCo
International
2009
•Turkey and parts of
Central Asia
realigned under PI
i.e. from MEAA to
UK and Europe
MEAA was made
AMEA,UKEU was
made Europe
division
PepsiCo
Americas
food(PAF)
Frito-Lay North
America(FLNA)
Quakers Food
North
America(QFNA)
Latin America
food(LAF)
PepsiCo
Americas
Beverages (PAB)
PepsiCo
International (PI)
Middle
East/Africa/Asia
UK/Europe

7. Present vs Past Scenario

8. Product portfolio
22 Product Lines
200+ countries
Sales of $1 Billion+ Annually

9. Fun for you
Better for you
Good for you
Help consumers meet recommended daily intakes of whole
grains, vegetables, fruits, dairy, nuts and seeds with low to no
amounts of particular nutrients, such as added sugars, salt or
saturated fat
Help consumers limit particular nutrients, such as added sugars, salt or
saturated fat, etc
Include beverages with fewer or no calories
Addresses the performance needs of athletes.
Options are treats for
consumers to enjoy responsibly

10. 2300+ Distributors in Beverages
2500+ Distributors in food
10 Lakh Retail outlets in Service sector

11. Reverse Innovation
And PepsiCo
GATORADE , The Godzilla of sports drinks :
• Came from an unlikely source: Bangladesh
• 1960’s : Epidemic outbreak of Cholera caused diarrhoea
resulting in severe dehydration.
• Treatment : Locals were giving a drink containing
carbohydrate and sugar in the solution with salt to treat
diarrhoea.
• The success of the treatment was covered in the British
medical journal Lancet, and it made its way to a doctor at
the University of Florida.
• The doctor saw a common problem in the need for rapid re-
hydration. If such a treatment worked well for cholera
patients, it would surely work for healthy football players.

12. Successful Innovations of PepsiCo
KURKURE
- Launched by Frito-Lay India
in 1999
- Adapted to local tastes
- Campaigns : Chala change ka
chakkar, Kurkure chai time
Achiever’s Award
- Sales registered upto Rs. 700
crore in 2009
ALIVA
- Launched by Frito-Lay India in
2009
- New , Baked savoury cracker
providing healthy and tasty snack
inline with local consumer’s taste.
- Promotion revolves around the
core idea of the product as
Chatpate crackers with wheat and
pulses .
NIMBOOZ
- Launched under Pepsico’s
beverage brand 7UP
- Company used innovative
technology to provide a longer
shelf life (4 months approx.)
- Faced supply shortage of
about 30 % due to its high
demands in the market

13. REVERSE
INNOVATION
Create Far from HOME, WIN EVERYWHERE – Indra K. Nooyi

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15. What is Reverse Innovation?

17. Reverse Innovation History
• Term introduced by Dartmouth professors Vijay Govindarajan
and Chris Trimble and GE's Jeffrey R. Immelt
• “Reverse innovation will transform just about every industry,
including energy, healthcare, transportation, housing, and
consumer products,” Govindarajan, who coined the term in
2009 while working as a chief innovation consultant at
General Electric
• Goods developed as inexpensive models to meet the needs
of developing nations, such as battery-operated medical
instruments in countries with limited infrastructure, are then
repackaged as low-cost innovative goods for Western buyers

18. Why Reverse Innovation
• Globalization efforts by removing expensive
features from their established product
• Attempt to sell these de-featured products in the
developing world
• Not very competitive approach
• Targets only the most affluent segments
• Reverse innovation: Products which are created
and tested in local markets, and, if successful,
then upgraded for sale and delivery in the
developed world

19. • Accelerating growth of EMs (2/3rd of World’s GDP)
• They are the non customers international organizations
could access
• Products tailored to their needs could form a platform for
new global products
• Global organizations have to develop new structures
and a mindset to capture those markets
Contd…

20. Classic Example of Reverse
innovation
• Tata Nano, a low budget car
introduced in India, costing
$2,000 is all set to launch it’s
new version in the European
markets
• The car will be modified
according to the taste and
preference of the users in
Europe and will be sold at a
higher price, thus backing the
‘Leapfrog Strategy’

25. • Drinkfinity
• Pepsi new shape of water
• Pepsi redesigns the water bottle
• Super bowl LII will be first zero waste
game
• Superbowl ad strategy beyond the
game
• PepsiCo investing $5 billion in to
bring innovation to Indian farms
• The Hello Goodness, The Future of
Convenience, Today

27. • PepsiCo has increased its presence in the bottled water
category – the #1 beverage product in the US by volume – with
sparkling water bubly and lifestyle brand Lifewtr.
• Adoption of rice bran oil over palmolein oil thus decreasing
saturated fat content by 40%
• More investments in India towards sustainable and organic
farming specially towards rice
• PepsiCo is focused on reducing its carbon footprint. Nearly 30
percent of its energy is today generated from renewable
sources such as rice husk boilers and wind turbines.

28. Profits
• PepsiCo India reported a net profit of Rs
190 crore in 2017-18 compared with a loss
of Rs 148 crore a year earlier, it said in the
latest filings with the Registrar of
Companies.
• PepsiCo India makes profit in India
after 7 years on cost-efficiency
measures
• it launched 80 products and variants,
including flavors, pack sizes and
packaging between 2015 and 2018.
• profit was driven by cost-efficiency
measures, high-margin products and
higher capacity utilization

29. • Good testing ground for large MNCs
• Low cost of production and manufacturing
• Easier to relaunch product in developed
economy
• Easy shift of features and utility of product is
possible depending on consumer behavior of
developing and developed economies
• Eg, Tata nano is launched in western market by name
of Europa.
Impacts of Reverse
Innovation

30. • Better products for consumers and a variety of options to
choose from at reasonable prices
• Companies investing higher amounts in building the sustainable
technological infrastructure that would facilitate advanced
engineering. It would thus further stimulate industrialization
• Rise in the demand for engineers
• Reverse Innovation would definitely reform, and revolutionize
industry standards, market imperatives, and global expansion
and success strategy perspectives for the Multinationals who
constantly require to keep exploring various distinctive ways
and means to become resilient in the perilous market
conditions.
Advantages of
Reverse Innovation

32. PepsiCo and Emerging Markets
• Asia ,Eastern Europe and Latin America are emerging
Markets
• Emerging markets boost the sales during recession in
2008
• Innovative products and acquisitions major contributor
for growth in emerging countries
• Emphasis on local taste and consumer behaviour
• Focussed on R&D ,Marketing and distribution

33. Russia
History-
Introduced in 1959 , Marketing and distribution in 1972
Introduced popular Drinks -
carbonated drink -Pepsi-Cola, Pepsi Light etc
Non-carbonated drinks such as juice, tea, water and:
Energy drink brands like Aqua Minerale, Gatorade, Adrenaline Rush
Targeting strategies-
Customisation of products as per the needs and preferences of Russians
Expansion Strategies-
In 2005 , built snack manufacturing facility in Kashira, Moscow
In 2008 , acquire Russian juice company JSC Lebedyansky
In 2009, the company opened its largest bottling plant, at Domodedovo for
the business expansion of both PepsiCo and PBG

34. CHINA
• Started Operating in 1985
• Preferred market for carbonated Drinks as well as
favouring non-carbonated drinks
• Food category comprises of cheeseless Cheetos, Lay’s
in Cool Blueberry flavour
• Expanding through Local Juices using traditional
Chinese medicine as its ingredients eg-Mixed juice
drink of dates and wolfberries
• Also Focussed on Sustainable efforts of resource
conservation

35. Innovation Centres for Reverse Innovation -Emerging Markets
• India along with its peers such as Brazil, Russia and China
is an innovation hub as Emerging markets
• Emerging markets centre for Rapid growth
• Changing perception of MNC’s with growth and
expansion model
• Innovation also helping companies to lower down their
production cost
• Apart from PepsiCo various technology driven companies
also following Reverse Innovation Technique

36. Reverse Innovation and Technology
• Offering Needs and utility based product
instead of globally selling products
• Targeting the un-served markets
• Reverse Innovation - bringing down the cost of
Production
MAC-400
PHILIPS SOLAR -POWER LED
TATA NANO

37. Thank You
Let’s Have
Innovative
Year Ahead