Pepsi-Cola Products Philippines Inc. (PCPPI), the Philippine bottler of global food and beverage firm PepsiCo Inc., is entering the snack food business, saying an exclusive agreement has been forged with PepsiCo to produce some of its world renowned novelty brands.
PCPPI on Thursday it will manufacture and distribute PepsiCo’s popular snack food products in the Philippines where the company is eyeing what is potentially a 100-million consumer market.
The bottler is the second to sign a manufacturing agreement with PepsiCo, after the same snack food franchise was established in Bangladesh earlier this year.
PCPPI said the engagement in snack and beverage franchise operations is part of PepsiCo’s aim to integrate its portfolio across multiple platforms, including manufacturing and go-to-market execution.
The agreement also strengthens PepsiCo’s partnership with South Korea-based multinational food and retail conglomerate Lotte Group, which is also PCPPI’s largest shareholder. The snack makers have been partners since 1976, and formed a Philippine unit in 2010. The Lotte Group is also PepsiCo’s beverage partner in Myanmar.
PepsiCo’s brands include Cheetos, Lays, Ruffles, Tostitos, Doritos, Fritos and Walkers.
“This development presents an exciting opportunity for PCPPI to further its vision of becoming a premier food and beverage company in the Philippines. Leveraging on PepsiCo’s established line of snacks is an exciting and strategic step in our first foray into the foods business,” Furqan Ahmed Syed, PCPPI president, said in a statement.
“PepsiCo’s iconic brands like Cheetos will be another welcome addition to PCPPI’s portfolio of high quality food and beverage offerings – satisfying the need of Filipino consumers for great tasting snacks while complimenting our current roster of thirst-quenching beverages,” said Jika Dalupan, PCPPI’s vice president for Corporate Affairs and Communications.
“We are very excited to embark on this new expansion of products in the Philippines. Lotte remains firmly optimistic in our partnership with PepsiCo and PCPPI in serving the food and beverage needs of the Filipino people,” Yeon-Suk No, PCPPI’s CEO, added.
In the first quarter of the year, PCPPI s saw a 41 percent increase in net income to P192 million on-year. Total revenues rose by 13.5 percent to P7.3 billion, bringing gross sales margin up by 170 basis points.
Incorporated in 1989, PCPPI is engaged in manufacturing, sale and distribution of carbonated and non-carbonated beverages that include Pepsi-Cola, 7Up, Mountain Dew, Mirinda, Mug, Gatorade, Lipton, Tropicana/Twister, Propel and Sting.