Pepsi Sales in Pakistan

Topics: Soft drink, Pepsi, Coca-Cola Pages: 16 (3481 words) Published: January 17, 2010

Beverage Industry Overview:

The juice and beverage industry is one of the largest and most contributive industrial sectors in Pakistan. Currently there are about 170 units operating in Pakistan that produce water, syrups and squashes, because of which both upstream and downstream industries have grown and are flourishing. According to CBR, the beverage industry in Pakistan has grown significantly over time.

Pakistan has become the 6th largest exporter of Food and Beverages in the world contributing significantly to the country’s economy. Beverage industry in Pakistan has tremendous growth potential if it is given the proper backing.


Currently, of an estimated one million metric tons of cold beverages sold in Pakistan each year, 90% represent carbonated soft drinks (i.e., sodas, of which most of them are colas). There are two major names in the carbonated soft drink sector of the beverage industry of Pakistan i.e. PepsiCo and Coca Cola. Amrat Cola is another brand, which, although nowhere near the two market leaders, has still established something of a market share and name for itself in the northern areas of the country due its price competitiveness.

The remaining 10% of cold beverages purchased and consumed (100,000 tons) are juices, nectars and still water. Of these, 10% (10,000 tons) represent the approximate sales of 100% pure juice. Most of the existing fruit juice factories operate in Lahore, Bahawalpur, Karachi, Hyderabad, Hattar (NWFP), Lorali, and Sargodha. As reported by SMEDA, 24 formal fruit juice and pulp processing facilities, plus a number of small informal factories are operating in Pakistan. Estimated installed capacity is approximately 400,000 metric tons per year with a growth rate of 20% to 25% based on a total fruit juice market of Rs2.5– Rs2.6 billion.

The beverage market in Pakistan is expected to grow at between 20% - 25% per annum in the coming years. However, no clear predictions can be made because the beverage industry is one of the most fluctuating an unpredictable industrial sectors, where demand increases and decreases on a daily basis depending on several factors like season, sudden rain etc.

While demand is generally expected to increase, what is not clear is which sector of the market, and product groups are likely to benefit from this growth. If the market continues to grow as it has in the past several years, the largest growth is likely to take place in the carbonated soft drink sector where investments in sales campaigns continue to overshadow the non-carbonated soft drink market because local juice manufacturers generally do not have the resources to compete e.g., with Coca-cola or PepsiCo. Nevertheless, given a more reliable supply of raw material and sufficient investment in advertising and marketing, opportunities exist for the juice industry to influence consumption patterns and consumer preferences towards greater consumption of pure juice and high juice content drinks.

The market for 100% pure juice (“nectar”) in Pakistan will grow only slowly over time. Not only does a 100% pure juice product cost more than the juice drink, soft drink and bottled water alternatives, but that the general populace has limited discretionary income, has limited knowledge of the nutritional differences between fruit drink (10% - 15% pure juice) and 100% pure juice; and make cold beverage purchase decisions based on the following order: price, taste and brand.

Organization Overview:

PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than $43 billion and over 198,000 employees.


Mission Statement:

“Our mission is to be the world's premier consumer Products Company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in...
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