Sales were also impacted during last two quarters of 2017 financial year due to demonetization where people were forced to use things other than cash
PepsiCo's India lost its fizz even as its largest rival Coca-Cola posted double-digit growth amid health conscious consumers cutting down on sugary aerated drinks. PepsiCo India Holdings saw revenue grow 0.2% during year to March 2017 to Rs 6,540 crore while Hindustan Coca-Cola Beverages, which account for two-thirds of Coca-Cola's revenue, posted 11% growth in revenues at Rs 9,472 crore.
Hindustan Coca Cola Beverages Spokesperson said “it changed accounting standards that propped up revenue growth. On a comparable basis, both current and previous year as per IND AS reporting, our revenues have remained steady. We certainly have the scale and the reach to make a difference to the food-processing sector in India and the agri ecosystem of the country. There are more people entering the ready-to-drink beverage category and our focus is to build HCCB into a ‘total beverage company’ that has a play in all beverage categories of relevance”.
PepsiCo India spokesperson said “This was reflected in FY 2016-17 performance that saw us progressing ahead with strong double digit growth on our core brands like Tropicana and Lay’s. While the end of H2 FY 2016-17 growths was impacted on account of some macro head winds, business momentum has been recovering over the last 3 quarters. Sales were also impacted during last two quarters of 2017 financial year due to demonetisation, where people were forced to use things other than cash".
Growth has slowed in the Rs 22,000-crore carbonated soft drinks market as consumers switch to healthier beverages such as juices, energy drinks, flavoured tea, fortified water and dairy-based beverages. Both PepsiCo and rival Coca-Cola have been hedging risks by reducing dependence on core soft drinks and introducing either sugar-free drinks or non-aerated beverages.
Pepsi lowered its investments on commoditised, low margin segments including low juice content segment. PepsiCo's recent launches include 7Up with natural sweetener stevia, Pepsi Black with zero sugar, hydration drink Revive and several local and international flavours in juices.