Has the “new normal” caused PepsiCo India to fast-track specific strategic priorities? If so, could you give us some insight into this?
The new normal has had the entire industry to pause, think, and evolve as far as strategic priorities are concerned. We recalibrated our strategy based on six guiding principles of being people, consumer and customer centric, being agile and prudent along with being community driven.
At PepsiCo India, safety of our people became our highest priority as they are the real reason for our success. On the consumer and customer centricity front, we kept our ear to the ground and quickly adapted to new channels and SKUs to meet demand.
Brands across our portfolio partnered with channels like Amazon, Big Basket, Grofers, Swiggy and Dunzo to ensure contactless delivery to the consumers doorstep. For B2B, we strengthened our existing distributor model with the EB2B model, where we partnered with Udaan and Big Basket to help small and medium businesses. This partnership ensured our product portfolio was easily made available to retailers, so that they can cater to demand in the market. Additionally, to ensure uninterrupted supply and last mile availability in rural India, we have partnered with CSC e-Grameen to provide our products at the doorstep. We also worked towards strengthening our portfolio through innovative SKUs at competitive price points to address the increased in-home consumption market.
To be even more agile and prudent, we accelerated our digitisation drive across our supply chain, which helped us predict better, prioritise certain SKUs and retail channels and reduce costs in our production to the customer doorstep value chain. It also allowed our employees to work seamlessly from remote locations.
Lastly, we doubled down on our efforts on community centric initiatives. We supported the impacted underserved communities by providing over 10 million meals and 35000+ COVID testing kids across the country. We also supported our farmer partners by providing them hygiene and safety kits to deal with the pandemic and continue to ensure demand for their produce.
The brand-consumer connect might be changed forever amidst recent events. What do you believe to be the best way forward?
The COVID-19 pandemic is making both, consumers and brands face a new reality. Some of our views capturing the emerging trends to strengthen the brand-consumer connect are as follows:
- Mobile is the new TV: Consumers, customers, employees and our ecosystem partners have leap frogged towards leveraging digital solutions and the mobile is at the epicenter of all this. Be it work from home, communication to consumers, taking orders from customers, consumers are practically dependent on their mobiles. They are consuming content online, buying online and even engaging with extended family and friends online. Therefore, it’s important to jump shift this capability and work with the ecosystem partners to strengthen this muscle.
- Hope, Trust and Fun: At PepsiCo, we did a consumer research in current times and three key pillars stood out. We believe consumers today are looking at brands that can deliver these emotional benefits authentically as well. For us, these three pillars have become the cornerstone of our communication with consumers.
- The first is Hope is tied very closely to empathy. Brands need to be empathic and craft messages which are reassuring and relatable to consumers in these unprecedented times.
- The second is Trust. Now more than ever, consumers need to see brands walk the talk in everything they do – whether it is the core product promise or leading a cause to support communities.
- The third is Fun. Today, consumers are working twice as hard, donning multiple hats and with sources of entertainment and recreation being limited, a brand that can present an opportunity for consumers to express themselves in a fun manner will be able to build deeper connects with the consumers.
- Hybrid retailing: Convenience of product availability has always been important for building the connect with the consumers and going forward it would become even more crucial. Hybrid retail model is here to stay and not just a passing phase. FMCG businesses have to keep up with the hyper-competitive and ever-changing retail landscape, where digital and physical retailing are truly becoming one. The companies that can re-engineer their business models through a hybrid retail model, would succeed in the long term.
The situation would continue to evolve, and it is important we continuously have our ear to the ground, and we keep sharpening the strategy basis consumer needs.
Are there any new opportunities or challenges post-Covid that must be watched out for? If so, what are they?
At this point it is difficult to predict a post Covid world. We recognize that recovery will come in different stages for different businesses but the need to go digital is imperative. Digital transformation is an opportunity that has never been more relevant than today and is quickly redefining the way in which we all live, engage and work.
Specific to our industry, on the urban front, while in-home consumption remains strong, we are also beginning to see out of home or on the go consumption rising as the country continues to unlock more with each passing day. At the same time, demand from rural India remains strong, for both our snacks and beverage products as a result of improved monsoons, labour migration and increased distribution of our portfolio. To address the improving demand, we continue to closely look at news way to reach our consumers.
We also continue to focus on prioritizing profitable channels, diligently managing SKUs and ensuring revenue management, margin improvement and driving execution & productivity across the system is helping our businesses to weather the pandemic and swiftly pivot for the future.