Double-digit decline for PepsiCo’s India revenue amid Covid-19 crisis

Snacks & beverages major PepsiCo said it had registered double-digit decline in its India revenue between April and June. The firm’s sales of snacks and beverages during the period was hit as lockdowns kept sporting events off ground and hotels, malls, restaurants, and multiplexes shut to contain the spread of Covid-19.

A six percentage-point impact on its net revenue in India, due to a prior-year refranchising of a portion of its beverage business, brought down its net revenue for the Africa, Middle East, and South Asian (AMESA) region by 1 per cent during the period. Its beverage volume uptake for AMESA shrank by 25 per cent as sales fell by double digits in both India and Pakistan.

While other key markets registered a 117 per cent rise in snacks volume during the period, partly aided by customers stocking up in panic, in India, it declined by double digits.

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The firm’s operating profit plunged 75 per cent due to a high base in India and it took a 67 percentage point impact of merger and integration in the South African market. During the corresponding quarter last year, the refranchising exercise of its bottling operations in India had improved its operating profit by 4.5 percentage points.

Overall, beating the Street estimates, net revenue declined 3.1 per cent to $15.95 billion. According to Chief Executive Ramon Laguarta, PepsiCo globally spent nearly Rs 3,000 crore on costs related to the pandemic, including PPEs for employees.