Pepsi Phils hopes non-soda products will bring in as much revenue as sodas

Pepsi's local franchise holder believes its non-carbonated products will be on the same level as its more established carbonated brands in the next three to four years, starting with its recently launched coconut water-based drink. According to Pepsi Cola Product Philippines president Partho Chakrabarti, the company's non-carbonated drinks or juices currently produce about 30 percent of the company's total revenue, with their carbonated counterparts bringing in the majority of the revenue at 70 percent. He thinks that the percentage could shift closer to 50-50 in the near future. “Over three to four years we hope to be half and half… People are shifting to healthy beverages. It’s a worldwide trend and the Philippines is no different,” Chakrabati told reporters Thursday at the sidelines of the launch of the company's new Tropicana product Coco Quench. “It’s going to be a gradual shift,” Chakrabarti added. He noted that carbonated drinks, or sodas, have a competitive advantage over juices because of their relatively cheap price and because of an established “habit” among drinkers. “But it is the non-soda which has always been our source of growth," he says. Chakrabarti said too that soda drinkers would likely shift to their new juice-based products as “another choice” for beverage. “A lot of people ask this question: If you create a new product, obviously there’s the chance that a lot of people will drink your new product than your old product. It always happens,” he said. He noted too that “we’re not veering away [from soda]. We’re just giving one more choice.” Pepsi started distributing Coco Quench last month, which company officials says is a more healthful bevereage than soda products. Chakrabarti said their new product would “definitely” help them increase their market share in the juices category, as coconut beverages are popular in the country and as only Pepsi Philippines sells a coconut water-based drink in its portfolio. This product, Chakrabarti expects, would dominate the local coconut water industry, which covers a “small market” of two to three million cases a year. According to company data, Pepsi’s soda market currently takes 22 percent share in the entire beverage market, next to Coca Cola Philippines. In the juice category, Pepsi takes about 25 percent, while rival Del Monte Philippines controls 26 percent. Pepsi is the majority player in the Gatorade market at 95 percent. “We own the whole category,” Chakrabarti said. Coconut-based drink Pepsi Philippines aims to produce 30,000 cases of Coco Quench each month, said product brand manager Beverly Po. Po also explained that the company sources its coconut water from Quezon province in partnership with Quezon-based plantation company Peter Paul Philippines Corp. The coconut water is extracted, heated in ultra-high temperature and stored in “asceptic condition” within its tetra pak and sealed in less than a minute—a process, said Po, that lets the coconut water retain its nutrients. The publicly-listed beverage company registered P577 million in net income for the first half this year, up from P107 million a year earlier. It has generated gross sales of P11.312 billion for the period, up from P9.778 billion last year. Pepsi is the manufacturer of beverages such as Pepsi Cola, Seven Up, Mountain Dew, Mirinda, Mug Rootbeer, Gatorade, Tropicana, Propel, Lipton and Sting. It currently has 11 bottling plants in the Philippines. — BM, GMA News