Interview with Pepsi Egypt Co

Topics: North Africa, Egypt, Africa Pages: 6 (1808 words) Published: January 11, 2009
The Fast Mover
Pepsi’s chief of North African operations speaks out on the challenge of maintaining a 70% market share in the fast-moving consumer goods industry

On a rare rainy Cairo afternoon, minutes before rush-hour madness kicks in, Tarek Kabil signals he’s ready for his interview. The Pepsico president’s immaculate North African office, located in the Chipsy building in Dokki, headquarters of the company’s Egyptian snack foods division, has the atmosphere of a rarely used conference room, most likely due to his once-weekly presence in the building.

Kabil is calm, relaxed but professional and above all confident a man who thrives as a center of calm in the fast-moving consumer goods (FMCG) industry.

A mechanical engineering grad from Alexandria University, Kabil arrived at Pepsico 10 years ago from Proctor & Gamble, moving up through the ranks to become president of the company’s North African operations a year ago.

What brought him to Pepsi in the first place? “The challenge,” he says. “Pepsi is a great company. It is a strong and fast consumer goods company,” he says. “Extremely fast. Fast in the way we do business. Fast in the way we create product, our positioning, how we compete.”

As president, Kabil runs the company’s beverage and snack-food divisions in all North African countries, including Mauritania, Ethiopia and Sudan. It’s a broad territory that has pushed Pepsico to adopt marketing and sales approaches tailored to each individual culture and economy.

“You will see differences in packaging and pricing, which is linked to the gross domestic product, consumer habits and many other things,” Kabil muses.

After Egypt, Sudan is North Africa’s second-largest beverages market, where weather conditions and the difficulty finding clean drinking water in certain areas leads to higher consumption of bottled drinks. But Pepsi’s most interesting growth prospects could be in Libya and other countries in the region that are slowly opening to outside investment. Libyans, for example, already drink an average of 200 cans of Pepsi a year, compared with 55 in Egypt and just five in Ethiopia.

Pepsico’s share of the regional beverage market stands at approximately 70%.

Mauritania, he suggests, is one of the biggest challenges: Its small size and status as one of the world’s most-indebted nations, together with its relatively “inaccessible” status, have made it one of Pepsi’s smallest territories in the region.

Doing business in neighboring Algeria has proven similarly interesting.

“You have over 300 local players because war conditions have kept most international companies out and it became a good time for hundreds of local players to get in,” he says. The cheap costs and low quality of many of these local brands have only added to Pepsi’s challenge: Kabil makes it clear that his company will not compete on price “because we want to maintain our quality standards.”

At some 72 million residents and growing, Egypt remains Pepsico North Africa’s largest market.

A trip through Cairo clearly shows that Egypt is a Pepsi world. The company has invested over $800 million here, with seven bottling and 28 distribution centers for its beverage sector and three Chipsy plants and 26 distribution centers for its snack food division.

In total, Pepsico employs 8,200 people in Egypt. In addition, Kabil cites an AUC study that concluded that for every one Pepsico employee, 10 people are indirectly employed through the ‘run-off’ jobs created by Pepsi’s presence here.

Egyptian tastes for Pepsico products remain primarily in the beverage sector, with 40% of Pepsi beverage drinkers preferring Pepsi itself, 35% quenching their thirst with lemon-lime products such as 7-up and the rest grabbing a fruity drink such as an orange or pineapple Mirinda.

And lately, when Egyptians reach for a Pepsi, they also grab a package of Cheetos-mini, the company’s latest snack food innovation, which Kabil says has been...
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