PepsiCo creates snacks franchise in Philippines via drinks partner

PCPPI will start to manufacture and distribute the snack brand across the Philippines later this year.

Maricelle Narcisco, general manager at PepsiCo Philippines, said the country was a “highly attractive”​ market for further growth.

“The establishment of a snacks franchise operation reflects our commitment to bring more locally-made products to our consumers and customers, and to drive synergies in the manufacturing and distribution of our delicious food and beverage products wherever possible,”​ she said.

The agreement marks PCPPI’s first foray into the food business. The company was previously focused on manufacturing and distributing PepsiCo beverages, including Pepsi-Cola, Tropicana, Gatorade and Mountain Dew.

Snacks and beverage synergies​

PepsiCo said the move reflected the company’s commitment to its ‘better together’ plan – leveraging synergies between its beverage and foods businesses.

“The creation of the joint snacks-and-beverage franchise operations in the Philippines reflects PepsiCo’s ongoing drive to ensure the integration of its food and beverage portfolio across multiple platforms, including manufacturing and go-to-market execution,”​ it said.

Company CEO Indra Nooyi previously said snacks and beverages were “truly better together”.​​

“Our entire portfolio is focused on taste and convenience. Our products are purchased together and consumed together. Our presence in beverages supports our snacks growth​,” she told analysts last year during a call for the company’s full 2013 results.

Frito-Lay CEO Tom Greco also previously said the ‘better together’ strategy made sense​ from a consumer shopping point of view.

“The incidence of co-purchase between salty snacks and liquid refreshment beverage is higher than peanut butter and jelly. That’s because snacks and beverages occupy common demand spaces,”​ he told analysts at the CAGNY 2015 conference earlier this year.

He said combining snacks and beverages also gave PepsiCo scale to outpace rivals at retail level. “More than one of our customers have said ‘I’ve got to grow my business with my biggest supplier’, so they have a vested interest in seeing that our business grows,”​ he said.