PepsiCo's vice president of supply chain and operations, Niteen Pradhan claimed that the $63-billion company has set-up India's largest production line of nachos in its factory near Kolkata after making a "substantial investment" in the unit. It gives the company ample scope to roll out substantial volumes as per the demand, besides providing it an immediate edge in production capacity over its competitors. However, he declined to comment on the installed capacity and the current utilisation levels.
At a later date, however, the nachos production line may be extended to other plants. At present, the company operates on 62 facilities- both owned and outsouced centres- that are used for making snacks and beverages. Out of this, 19 units produce snacks, while the remaining 43 are engaged in beverage production.
Accoding to Kotecha, the nacho sub category that is the fastest growing segment in the snacks vertical, is projected at Rs 200 crore. The segment has been growing at an annual rate of 40-45 per cent, he adds.
Currently, Greendot Health Foods' indigenous Cornitos brand, which is estimated to grow by 30 per cent annually, dominates the nachos category in India with a 70 per cent market share. The global Doritos brand, which has limited presence, doesn't command a significant market share so far.
Product will be availbale in six cities across India in the initial stage. However, company plans to increase its presence by making the new brand available in up to 40 cities in the following month. Thereafter, by the end of the ongoing fiscal year, it will go for a pan-India rollout.
Cornitos, on the other hand, has a significant presence in across 300 towns and cities with a base of 30,000 outlets.
To gain a significant market share, while the company is relying on the traditional mode of high impact TV and digital advertisements, besides consumer engagement initiatives, it is majorly depending on the global appeal of the brand to sell and position the product in the country.
"Doritos is the number one brand globally and it will definitely pull in consumers", Pradhan said.
However, when asked if the Indian division of the New York-based company is planning to introduce other global brands that aren't currently available in this country, Pradhan said, "It depends on the market demand and its readiness to respond well to a global brand".
For the nachos, tortilla and corn chips deck, PepsiCo has brands other than Doritos like Tostitos, Fritos and Santitas- all of which PepsiCo hasn't made available in India.
However, on the snacks business, PepsiCo has been experiencing low single-digit growth in 2016 amid flat volumes in the domestic snacks business in 2015.