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Pepsi Plans to Focus on Healthier Beverages

As the world's second largest carbonated soft drink manufacturer and the largest packaged foods product manufacturer, Pepsi is making a push into the healthy foods market. In an effort to further this initiative the company recently completed the acquisition...
 Pepsi Plans to Focus on Healthier Beverages
 
 

As the world's second largest carbonated soft drink manufacturer and the largest packaged foods product manufacturer, Pepsi is making a push into the healthy foods market. In an effort to further this initiative the company recently completed the acquisition of Wimm-Bill-Dann, a leading Russian manufacturer of fruit juice and dairy products.

Pepsi's nutrition business accounts for around $10 billion of the company's annual revenue, that is, one-sixth of the total. However, this number will increase to around $13 billion after the takeover of Wimm-Bill-Dann. Pepsi projects the global nutrition group to be a $30 billion business by 2020. In addition to this, Russia is expected to become the new battleground for the cola wars. Coca-Cola, which acquired the Russian fruit juice maker Nidan last year, now controls around 30 percent of the Russian fruit-juice market. However, with its acquisition of Wimm-Bill-Dann, Pepsi will now have a 40 percent share.

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Pepsi will also have a strong foothold in the lucrative Russian dairy market, which increased in size by 22 percent between 2006 and 2010, and is expected to grow by 12 percent in the next four years. Wimm-Bill-Dann controls around 30 percent of the Russian dairy markets. This acquisition will also help Pepsi to further expand into Eastern Europe and the former Soviet states.

Pepsi
believes that in addition to getting into the dairy business, the fruit juice business, shown under the Tropicana division for Pepsi, will also benefit. Pepsi estimates that Tropicana's international market share, by volume, increased from around 4.3 percent in 2005 to 4.5 percent in 2010. Going forward, they expect it to increase to around 4.8 percent by the end of the forecast period.

News Source: TheStreet.com



 



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