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Frito-Lay to serve desi snacks

Ratna Bhushan

NEW DELHI, Nov. 7

SO much for French fries and Tortilla chips. Indians seem to be snacking on ethnic foods with a vengeance. Which is good news for the corporate sector, given that the past few years have seen a perceptible shift towards the branded sector at the cost of the unbranded segment.

It's logical, therefore, that Frito-Lay India, PepsiCo's consistently profit-making snack foods arm, is turning the spotlight on desi snack foods for its Lehar Namkeen brand. Mr Manu Anand, Managing Director, Frito Lay India, told Business Line that Frito-Lay's focus in the near future would be on locally manufactured snacks. "There is a huge market development opportunity in locally manufactured snacks that cater to local tastes and preferences. We plan to leverage this potential."

On the other hand, imported snack brands such as the corn chip-based Doritos were likely to be brought in over the next couple of years, Mr Anand said.

While industry estimates suggest that over three-fourths of the total (branded and unbranded) 2,90,000-tonne ethnic snack foods market remains unbranded, this sector has been flat over the past few years. The branded market is estimated to be growing at 15 per cent annually.

Another area Frito-Lay is bullish on is the 35-gm Rs 5 packs. "This segment is growing at least three times more than the regular category. Small packs work very well to drive distribution and penetration. A substantial part of our volumes are contributed by small packs." The brand is also available in 200-g packs.

Internationally, Frito-Lay contributes $11 billion to the $27 billion PepsiCo Group. While Mr Anand declined to divulge the financials of Frito-Lay India, industry sources peg its turnover at about Rs 250 crore.

The major chunk of Frito-Lay's snacks is manufactured out of its factories at Channo in Punjab and Ranjangaon in Pune with a combined annual capacity of 17,000 tonnes. About 10 per cent of its products are outsourced from the Rs 50-crore Bikanervala Foods Pvt Ltd. According to Mr Anand, Frito-Lay is likely to maintain this ratio over the next few years, with no immediate plans to outsource from other manufacturers. Last year, Frito-Lay India had infused an additional Rs 35 crore at its Pune facility.

While Lay's, the flagship brand of Frito-Lay, remains the leading potato chips brand, the acquired Uncle Chipps is being pushed in smaller towns. Other brands in Frito-Lay's portfolio include Lehar Kurkure and Cheetos.

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